Whether you are in the market for Medicare, or a current Medicare beneficiary, you have shark-infested waters to navigate.
Your basic choice is between Original/Traditional Medicare (TM) plans with a supplemental policy you’ll need for full coverage, and Medicare Advantage (MA) plans, which is neither Medicare or an advantage, but can be virtually (or actually) premium free with all sorts of added perks such as vision, dental, hearing, gym memberships, etc.
For many seniors on fixed incomes, there is really little choice, which is why MA plan enrollments are steadily increasing, now enrolling 51% of Medicare eligible seniors.
But buyer beware. There are no free lunches in life.
With TM, the federal government pays directly to providers from the taxpayer funded Medicare Trust Fund. Beneficiaries pay premiums and deductibles, but have access to a wide range of doctors and hospitals. A supplemental or “Medigap” plan will limit out-of-pocket expenses since TM has no out-of-pocket expense limit. Average administrative costs are 2%.
With MA, the federal government pays a third party (often a commercial insurance company) a fixed amount per enrollee to manage patient care. The amount is based on patient “risk.” MA profits by making patients appear sicker (through upcoding of risk) and minimizing what they spend on actual patient care. MA insurers can keep up to 15% as overhead and profit.
Taxpayers pay an average of $321 more per enrollee per year for MA vs. TM with an average annual profit of $1,608 per enrollee (2016-2018).
MA risk scores are 19% higher than in TM (more dollars coming in) but pay less for patient care through restricted networks, hidden fees for costly care such as chemotherapy, denial of prior authorizations (13% more than TM) and denial of payments (18% of charges that would have been approved by TM).
But wait. There’s more.
Enter direct contracting entities (DCEs), developed during the Trump administration to privatize TM using the same playbook as MA, increasing capitation payments by upcoding diagnoses and spending as little as possible on care. Think of DCEs as MA on steroids. Middlemen/insurers can keep up to 40% in overhead/profit, spending only 60% on patient care. Any company can be a DCE and the majority are investor owned.
If your doctor’s practice joined a DCE and you are a TM enrollee, you were automatically swept into this program without your consent and likely without your knowledge. Most people have never heard of DCEs. The idea was to expand DCEs to all of TM in eight years.
If a senior is auto-aligned with a DCE, the only way to remove themselves from the DCE is to change primary care providers to one not participating in a DCE. This is difficult for most patients and especially seniors. Just as MA aggressively markets to seniors, DCEs are aggressively marketing to physician practices.
Several DCEs, along with their parent and affiliated companies, have been involved in health care fraud and malfeasance by overcharging, but have settled for hundreds of millions of dollars rather than go to court.
In January 2022, 54 members of Congress sent a letter to U.S. Department of Health and Human Services Secretary Xavier Becerra demanding an end to the DCE program. The Centers for Medicare & Medicaid Services canceled the DCE program at the end of 2022 but rebranded it as ACO-REACH (Accountable Care Organization-Realizing Equity, Access, and Community Health) which went live Jan. 1. The entities/companies charged with fraud as DCEs were not excluded from participating in ACO-REACH.
This program is a threat to Traditional Medicare and aims to completely privatize Medicare by 2030.
Health care in the United States is expensive, inefficient and often ineffective. It is past time to remove the profit from health care and enact improved Medicare for All, with everyone in, no one out.
For more information, please see pnhp.org and protectmedicare.net.
Christine Llewellyn, M.D., of Williamsburg is a retired radiologist most recently employed at VCU Health. The opinions here are solely hers.
