The insurance company mafia and Medicare Advantage: Taking your money and denying you care

If the government were considering ways of making small businesses function more effectively to meet the needs of their customers and make a reasonable living for their owners, they would consider the stakeholders. Those might reasonably be the owners, the customers, and perhaps the suppliers. And, of course the gangsters who supplied “protection" to the owners – that is, protecting them from damage that might occur if the owners didn’t pay up.

Oh. You don’t think so? Why would we include the gangsters who just prey upon these businesses, drive up costs and thus probably prices, and threaten bodily harm to innocent people? Well, why not? After all, they have a stake in those businesses as well. If this seems like a ridiculous idea, consider the fact that we do it whenever we consider changes to our healthcare system in the United States. Except, in that case, it is the health insurance, a huge parasitic industry that preys on the health of the American people by sucking out billions in profit from funds intended to pay for our actual health care. We not only allow it, we encourage it!

The patchwork nature of health insurance coverage in the US is incredible. Many folks are coverage by policies held by their employers, or the employers of family members, but the employer contribution has been decreasing with increases in what employees have to pay in premiums, co-pays, and co-insurance. Others are covered by government programs – indeed, when considering all of these including Medicare, Medicaid, military families and retirees, employees and families of federal, state, and local government – public funds are more than half our health expenditures, rising to about 60% if the taxes foregone by the government because (unlike wages) employer contributions but not employee contributions) to health insurance are tax free. And still others have insurance through the ACA (Obamacare) or actually pay their whole cost. And, of course, lots and lots of people are uninsured.

And the coverage for those who are insured varies tremendously, from plan to plan, insurer to insurer, employer to employer. Many policies are so bad that those who have them are almost as bad off as the uninsured – but they are paying for it. People get low-cost policies because this is what they can afford,  but pay the price when they find out they are sick. It is bad, bad, bad, inefficient, incredibly expensive, and, like all “protection” plans, beneficial only to the insurance company mafia. But it is even, in a way, more egregious when we consider how it has cannibalized Medicare, the federal program that is supposed to cover the aged, blind, and disabled. Not that it is ok to screw the younger, non-blind or disabled portion of our population, but Medicare, passed in 1965, was supposed to ensure health care for the elderly, who are, in fact, more likely to be sick.

But then we get “Medicare Advantage” (also known as Medicare Part C), pushed by successive Republican administrations and assented to by the Democrats who seem to believe the hype. Let’s be clear about what MA is and is not. It is NOT Medicare, the program funded by your Medicare taxes from your paycheck (Part A) or general revenue + you (Part B). It is private health insurance being paid for with Medicare dollars (and the MA insurers get more, per capita than Medicare itself). It is usually a PPO or HMO plan, which can (and does, its essential character) restrict the health care providers (doctors, hospitals, etc.) you can use, and can and does make it more difficult to get care by denying payment (illegal as such; it is supposed to cover, by law, everything Medicare does, but it can delay and delay by repeated denials) or requiring prior authorization for – everything. Sometimes until it is too late and you die. We’ll look at some examples.

In a piece subtly titled “Deny, deny, deny”, NBC News on Oct 31, 2023 describes how rural hospitals, usually the sole community provider, are losing so much money from MA plans denying their claims that they are either in danger of closing or at least will no longer accept MA. That, of course, creates major problems for their patients covered by MA plans – remember, they are not a problem until you get sick! ‘Rose Stone of Holly Springs, Miss., said she stopped going to her doctor after her Medicare Advantage plan wouldn't pay for the visits. “It was a mess,” Stone told NBC News. “I didn’t go to the doctor because I was going to have to pay out-of-pocket money I didn’t have.”’

The Washington Post, on Nov 29, 2023, in Hospitals and doctors are fed up with Medicare Advantage, discusses that they are not only fed up, but they are refusing to accept MA plans because it does not pay them for the services that they provide. Scripps Health in San Diego joined Mayo Clinic and many other facilities in not taking any MA plans. The problem with the article is it can be read to imply that doctors and hospitals are greedy, since ‘Medicare Advantage plans are pretty popular with both lawmakers and ordinary Americans — they now enroll about 31 million people, representing just over half of everyone in Medicare, by KFF’s (Kaiser Family  Foundation) count.’ Popular with lawmakers because, a lot, they are heavily lobbied by insurers and get campaign contributions from them. Popular with ordinary Americans in the same way that a lot of things are popular – they are heavily advertised and cheaper on the front end than having to buy a Medicare Supplement plan because Medicare only pays 80% of the money it approves for covered services. And they provide glasses, and dental, and often drugs without a separate Part D plan, and even gym memberships! Great! Until you really need care…like Ms. Stone.

Or like the woman who was denied coverage by Cigna for a lung transplant and died, as discussed by former insurance executive and current whistleblower Wendell Potter in his substack, “Health Care Un-Covered”, on Nov 27, 2023. Or the reports of massive denials, including those that break the law, identified by ProPublica in partnership with Scripps News and reported by Potter on Nov 30, 2023. These are not isolated stories; they occur all the time.

Potter also testified in favor of retirees from Cortland County,  NY, when the county was trying to push them all into an MA plan run by UnitedHealth. For this year, at least, they were successful, arguing basically about how Prior Authorizations (PAs) required by UnitedHealth would limit their care. At the last minute, under discovery, they obtained a (possibly incomplete) list of services requiring PA…essentially everything (see the list at the end of this post)! And if anyone is worried that these doctors and hospitals wanting to be paid for the work that they actually do for people’s health (remember – insurance companies do ZERO of this!) will bankrupt the MA plans, we can look at their profits. In a piece Potter wrote looking at how Cigna is trying to acquire Humana to get a piece of the MA market he provides the profit made by the largest players in the industry: Cigna $7.28B on revenues of $181B, Humana $4.2B on revenues of $93B, and industry leader UnitedHealth $28.4B on revenues of $324B – nearly 9%! ALL of this is on money that was intended to be spent on providing health care to Medicare recipients! No wonder they can pay for your gym membership! They sure ain’t hurting!

Other countries have much less complex and arcane coverage systems. You’re born, you’re covered. Everyone is in, no one is out. Pretty much everyone is in the same plan. That is what we could have if we had an expanded (to everyone) and improved (covering 100%, not 80%, of ALL necessary services, including mental health, dental, vision, hearing, drugs, long-term care) Medicare for All.

But the insurance company mafia stands in the way. Contact your senators and congresspeople! 

    From Wendell Potter, list of services (possibly incomplete) requiring PA from UnitedHealth:

The list includes:

• Cardiac rehabilitation services
• Intensive cardiac rehabilitation services
• Chiropractic services
• Outpatient diagnostic colonoscopy
• Supplies to monitor blood glucose
• Continuous glucose monitors
• Therapeutic shoes for people with diabetes
• Durable medical equipment
• Diagnostic hearing and balance evaluations
• Home infusion therapy
• Inpatient services in a psychiatric hospital
• Medicare Part B drugs and non-chemotherapy drugs to treat cancer
• Medicare-covered chemotherapy drugs to treat cancer and the administration of that drug
• Opioid treatment services
• Outpatient diagnostic tests and therapeutic services and supplies, including x-rays and other radiation therapies
• Lab tests and other diagnostic tests
• Outpatient mental health care
• Outpatient rehabilitation services
• Outpatient substance abuse services
• Outpatient surgery and other medical services at hospital outpatient and ambulatory surgical centers
• Partial hospitalization services and intensive outpatient services
• Basic hearing and balance exams
• Some telehealth services
• Second opinions prior to surgery
• Non-routine dental care
• Monitoring services in a physician’s office or outpatient setting
• Medically necessary medical and surgical services that are provided at home or nursing home
• Prosthetic devices
• Pulmonary rehabilitation services
• Skilled nursing care
• Supervised exercise therapy
• Outpatient services provided by an ophthalmologist or optometrist
• Eye exams for people with diabetes