Such a deal! Insurance companies keep your money and deny you care! How can I get in on that?

How’d you like to have a business that essentially everyone had to buy from, where the price for your service went up every year, where the quantity and quality of your service decreased every year, and more and more of the cost of providing it could be passed directly (as well as indirectly) to your customers?

Sound good? Welcome to the world of health insurance and pharmacy benefit managers (PBMs), often owned by the same companies! You get insurance premiums paid to you by people or their employers (and mostly by both, since the employers rarely pay the full cost anymore), and get to raise them every year, by far more than inflation or certainly your costs, as well as directly shift costs to your end-user customers (i.e., “patients” or “people”, not the employers) through the use of deductibles and copayments! What a deal! And then, even better, your main business activity is not providing service! Yes, while people (and employers) think they are paying for medical insurance so that when they get sick or need hospitalization or surgery it will be paid for, your main activity is finding ways to not pay for it! In fact, that is what you pay your employees to do – find ways to not pay for your customers’ healthcare! You have a whole variety of techniques to utilize for this purpose, and they are kind of “nested” or sequentially algorithmic:

n  Have the initial reviewer, possibly a nurse, or possibly an AI algorithm, just deny coverage.

n  Have the next level reviewer, often a physician, not necessarily (indeed rarely) in the specialty involved, frequently with no recent practice experience, and often not even in the US, deny the claim.

n  Have the next level reviewer (again, amazingly, often AI) deny the claim.

n  Figure that most people won’t appeal the denial. You’re right.

n  If they do appeal, maybe you’ll have to pay. Or you can start the process over!

To be sure, it is not always true that all companies always deny coverage, or that the process of prior authorization is always used even when everyone including the insurance company and their employees know that it is a perfectly appropriate claim being submitted by a perfectly appropriate provider for a perfectly appropriate procedure. But a lot of them do, and do it a lot. In a recent guest post on Wendell Potter’s substack “Health Care Un-Covered”, Rachel Madley (Director of Policy and Advocacy at the Center for Health and Democracy. covers hearings led by Sen. Richard Blumenthal (D-CT) on the practice of insurance companies and PBMs regarding prior authorization, denials, and the use of AI to make these decisions:

[B]etween 2019 and 2022, the prior authorization denial rate for post-acute care in UnitedHealth’s Medicare Advantage plans doubled. The denial rate for long-term acute care hospitals in Humana’s Medicare Advantage plans increased by 54% from 2020 to 2022. During this time, UnitedHealth, CVS/Aetna, and Humana increased their use of artificial intelligence (AI) for prior authorization reviews, often resulting in increasing denial numbers and decreasing (or absent) review time by human beings.

And not just United Health.

The report noted that CVS, which owns Aetna, saved $660 million in 2018 by denying Medicare Advantage patients’ claims for treatment at inpatient facilities. Around the same time, CVS found in its testing of a model to “maximize approvals,” which would be a good thing for patients, that the model jeopardized profits because it would lead to more care being covered. In 2022, CVS “deprioritized” a plan to increase auto-approvals because of the lost “savings” from denying patient care.

 

Great! But so what does this tell us that is new? Well, really, just that it is getting even worse from the execrable, immoral, and anti-human (and anti-decent-business) practice that these enterprises were already using. By the way, if you were thinking that I have made the case that these are good businesses to own and make money from, you’re right, but it is going to be hard to get in unless you are a multi-billionaire since these things are so profitable that they are mostly owned by entities known as private equity. That phrase, “private equity”, sounds kind of bland, but it means groups of people with a lot of money who buy businesses not only for making money from them, but by making money however possible. This includes not only immoral business practice, but also completely destroying the company and selling its assets for, literally or figuratively, scrap. Plus, UnitedHealth, CVS/Aetna, and Humana own so much of the market, there is not room for you.

 

And, of course, after hearings and findings like those of Sen. Blumenthal, we might expect increased regulation of these companies and this business, which could limit the gross ripoff of people’s money that fills the pockets of their investors. Well, not so fast.

The report recommends that the Centers for Medicare and Medicaid Services (CMS) collect additional data, conduct audits of prior authorization processes, and expand regulations on the use of technology in PA reviews.

Hardly draconian penalties! For callously and in pursuit of financial gratification denying health care to millions for years and years, the report recommends that CMS ask for – more data! We really want to know how badly they’re screwing the American people!

Humbly, I would suggest more than that. I would suggest that the federal government not only stop enabling this money grab – after all, through Medicare they are the largest funder of health insurance, and through Medicare Advantage (MA) plans (and more recently through privatized Medicaid programs), directly fund much of the money made by these insurers – they might actually regulate them and make them deliver on the product that they are supposed to! They could go back to being managers of Medicare programs but not owners of MA programs.

You know, it doesn’t have to be this way. Or you should know that. And Sen.Blumenthal, and his committee, and CMS should know that. They, are you, should all be aware of it because of the program that covers most seniors, Medicare. Traditional Medicare, not Medicare “Advantage”. Medicare, what I’ll call TM for Traditional Medicare, covers virtually all medically beneficial procedures, tests, and encounters, at virtually all doctors (very few don’t take TM, although many do not take MA). There is NO need for prior authorization with TM, and there are no denials for covered services. There is no review by anyone, doctor, nurse or AI robot, to see if there is a way that they can deny you coverage. They just pay it. They pay the amount that Medicare has authorized for that service.

Admittedly, they do not pay all of the authorized amount; for in-hospital care TM pays only 80% of the authorized amount. This is bad (although not as bad as not getting the service your doctor thinks you need at all!) but it is an entirely separate issue. One is a Medicare policy issue of paying only 80% and the other is an open-ended ability for insurance companies (including MA) to deny payment for your care based on their notions of … what will make them the most money. Indeed, I’m wrong; they are completely different things but not unrelated. They are both the results of policies put in place to try to weaken Medicare and make money for insurance companies through privatization. After all, if TM only pays 80% of the approved charges, and you have to buy a Medigap policy to cover it, this may be an incentive for you to join an MA program and make money for the private insurance industry! Another important difference is how claims are paid; TM pays out money to providers for services that you receive. MA gets all of the money allocated for you in advance, and then makes efforts to hold on to it by not paying for services for you. And, through a variety of tricks, it gets more than TM would allocate for you!

This is not what the federal government should be encouraging. It should not be pushing more people to be covered by private insurance, using Medicare, Medicaid, your employer’s or your own money. It should not be pushing people into programs that make a science of denying them necessary care. What should it do? Two steps:

1.      Put everyone in Medicare. Traditional Medicare. Everyone, birth to death, regardless of age, gender, race, ethnicity, or employment status. Everyone in one program.

2.      Dispense with the limits on what TM pays for. Not just that the current 80% should be 100%, but covering all needed health care services, including mental health, dental, glasses, hearing aids, and long-term care.

Pushing more people into programs where they are the mercy of profit-hungry insurance companies to receive the healthcare they need is the WRONG way to go!

For an easy-to-digest look at how Project 2025, which has been put together by right-wing “thinkers” as a list of what a new Trump administration should do, look at this very well-done comic, https://stopproject2025comic.org/comic/health-care/  You might also want to look at how Project 2025 will address all the other issues that affect your life! Here is one panel: 

PS: I found the other two cartoons above on my Facebook feed, and the creators were not credited. I am sorry for this; creators should always be credited for their work. I would be more than happy to do so if anyone can find who to credit!

Open Enrollment Season for Medicare and Medicare Advantage: What you should know

This is an unusually long post, but I decided it was better to have all the information in one post rather to divide it into two. Hopefully you can find the part/s you feel of use to you.

It is Medicare re-enrollment season again, so it seems to me to be a good time to review some of the key issues seniors should consider when deciding to sign up for the same, or a new plan. I have written about Medicare and Medicare Advantage a number of times (e.g., “Insurers in trouble for the wrong reason: Wall St. wants them to rip you off for even MORE!”, Aug 22, 2024; Medicare Advantage: OK, it's bad for the country, but what about for me?, Dec 6, 2022) and have been critical of Medicare Advantage (MA) plans, but I hope that this piece will be more informational. If you are Medicare eligible, You probably get a lot of “information” from both Medicare and MA plans at this time of year, the former providing nothing that could much help you decide (“it’s all good!”) and the latter not only assuring you that MA is the right thing, but that their MA plan is the best one for you. There are some things you should know, and consider, and I will provide some information and some opinions, trying to carefully label the opinions.

To begin with, it makes a difference if you are first starting on Medicare or are doing your annual re-enrollment (and perhaps changing plans). If you are starting, this is not necessarily the time of year when it happens; it happens whenever you turn 65. At that point, you are required to enroll in Medicare Part A, which is what covers inpatient hospitalization and is the only part paid for by the Medicare Trust Fund, funded by your Medicare deductions. If you are still working and are covered by an employer health plan, you do not need to enroll in Part B yet. Part B, which pays for doctor (and other clinician) fees and all outpatient care (including that rendered while you are actually in the hospital, even sleeping there for a night or two; this is a neat trick but not part of this discussion), is paid for by monthly payments by you, supplemented as necessary by general taxes. The “standard” monthly premium is now $174.70 (if your mean adjusted gross income, MAGI, as a couple is less than $206,000), but it can be decreased or eliminated for low-income people and is higher for high-income people thorough a formula called IRMAA (Income-related monthly adjustment amount). More of this financial information is here, from Medicare, and here from a private counselor. The IRMAA is based on your last tax return, so if you retire in 2024, it will be based on your 2023 return. If you think that you will make a lot less in retirement than you did in the last year you worked, you can appeal this, providing evidence that your MAGI will be less than it was before retirement. Anyway, you must enroll in and pay for Part B once you are no longer covered by your employer’s plan, and if you don’t you are subject to significant penalties.

There are two other letters, Part C and Part D. Part C is Medicare Advantage, about which more in a moment. Part D is the Medicare Drug Plan, passed under the GW Bush administration. It requires Medicare recipients to have such a plan, all of which are sold by private insurance companies, mostly the same ones that sell insurance to pre-Medicare people and also sell Medicare Advantage plans. It is good for them (opinion) as everyone is required to pay them a premium, and they work hard to pay out as little as possible, as do all insurance plans. (See my blog post Medicare Part D: Learn from my mistakes, Dec 13, 2022). I’ll just say now it can be confusing; you may want the plan with the lowest premiums, especially if you are not on drugs that require a high co-pay, but that is sometimes hard to figure out. You gotta do it, though.

Which brings us to the choice between Traditional Medicare (TM), a government funded system available to all eligible people (over 65 and some others with disabilities), and Medicare Advantage, which is not Medicare (despite the name) but a group of private insurance products paid for with Medicare dollars. In general, these are very similar to HMO or PPO plans for pre-Medicare customers. Both have advantages (no pun intended, by me, although the renaming of the program by Congress from Medicare+Choice is apparently an intentional effort to promote it), and disadvantages. A recent Associated Press article (‘Medicare Advantage shopping season arrives with a dose of confusion and some political implications’ Sept 28, 2024) notes that MA benefits are becoming less and choice of plans fewer.

The advantages (OK, I’ll call them plusses) of MA plans include one premium, often completely covered by Medicare dollars with little or no out-of-pocket cost to the recipient, that includes coverage for Part A, Part B, and Part D. It also may include coverage for other things not covered by TM, including glasses, hearing aids, and gym memberships. It may or may not include mental health coverage, and if it does the character and quality of that coverage varies. It rarely if ever includes long-term care. While many of these extra benefits are kind of loss-leaders that cost the insurers little, the big plusses of MA are not needing to pay a Part B or Part D premium in addition, or to buy a Medicare Supplement (no letter code here*) to cover the costs incurred and not paid by TM to its recipients. The big cost for folks with TM is that it only pays 80% of approved charges for hospitalization, so if you have a hospitalization for something that Medicare decides it can be charged $1000 for (this is not what the hospital charges, which can and usually is several times more, but they have to take the Medicare-approved amount), it only pays $800 and you have to pay the $200. Or $2000 if the approved charge is $10,000. Or whatever. It can be and often is a lot, which is why people on TM should buy a Supplement plan that will cover the difference. But cost them more.

So, so far this looks like a win for MA plans over TM: one premium, no Part B or Part D premiums, no need for a Supplement plan to cover the 20%, and some extra perks. This is why they are often well-received by the folks who enroll in them, and what is pitched in their mailings and TV ads. There are, however, some potential (and frequent) minuses to MA plans, which may want to make you consider TM, plus a Supplement.

The key issue is that MA is a private insurance plan, not Medicare, and this can and does result in some limitations as well as some more surprising payment issues, like denial of payment. As I mentioned above, MA programs are like HMO and PPO plans, and this means a limited network of providers (hospital and doctors), usually in your geographic area. Unlike TM, which pays claims from providers on a per-episode basis at the rate set by Medicare, MA plans get your money up front and pays providers based on deals they have negotiated, which is why you are restricted in the places that you can get care (they ones they have the best deals with). This is important, and so it is critical for you to be sure that the places and people from which you get care are “in-network” for them. If you have a second home or travel a lot or spend time with family outside your home region, you want to be sure that you can get non-emergency care there, since MA plans are usually geographic. In addition, you might consider providers you think you might want to get care in the future if something bad happens. For example, many top hospitals that people seek out across the country if they have cancer or another dangerous condition, such as Mayo Clinic, MD Anderson, and Sloan-Kettering, do not accept any MA plans, but do accept TM.

The thing is that these may not seem as important to you if you are 65 and relatively healthy and free glasses and hearing aids and gym memberships are nice, but they increasingly become issues as you age. Older people have more diseases than younger (even younger seniors) and use more care. Consider what your future might hold. If right now you just have a few aches and pains, and take a couple of medications that control some conditions, if you live you will get older and as you get older these are likely to get worse. Sometimes people in MA plans that are actually covering their expensive care can find the insurers urging them to switch to TM, since while those companies are happy to accept your premiums (or those Medicare pays on your behalf, which is, BTW, more than they allocate for TM patients) they are less enthusiastic about paying out large amounts, especially when it can go on and on.

The other big minus that comes from MA plans being private insurance is that they can, and often do, deny coverage for things your doctor has ordered. They can do that. If a procedure or treatment is Medicare-approved, TM simply pays it (although, in hospitalization, only 80%). MA plans, however, like other private insurance plans, can deny coverage for a variety of reasons. With some, denial is almost routine for anything expensive. You can appeal it, but most people don’t. And they can deny it again. And most people won’t keep appealing it. Relatively recent legislation requires MA to pay for any Medicare-approved treatment, but that doesn’t mean that they always do; they can deny on technicalities and even if they must pay fines, it is often considered “a cost of doing business” that is less than actually paying for your care.

So maybe get an MA plan when you are younger and healthier and then switch to TM when you need more care? In addition to this being exactly what the MA plans want – to cover healthy seniors and divest of them when they become expensive to care for, the other big issue is eligibility for and cost of Medicare Supplement (Medigap) plans. Under the law, if you take TM when you first start receiving Medicare, all those offering Supplement plans must offer them to you at “community rates”, that is, not adjusted for your individual health status. But if you sign up for an MA plan, and then a year or ten or 15 down the road decide you want to switch to TM for some reason (maybe you are unhappy with the providers available to you, and want to go to an institution that doesn’t accept MA, or are frustrated with the denials you receive for care that you and your physician think you need), you can at this re-enrollment period. But the “community rating” charge for Supplement plans no longer is required; those companies offering them (often the same ones offering MA) can do underwriting. This means that they can assess your current health status and risks and adjust their premiums upward based on it, or deny you coverage altogether. Since you are often making this change when you are older, sicker, and have greater risk, you may not be able to get, or afford, a Supplement. This is a serious consideration, both when you first get Medicare and in the early years of re-enrollment before you become very sick. And, if you live long enough, you probably will. So seriously think about the decision, including both current and potential future benefits and risk of harm.

Of course, and here is my big opinion, the whole idea of taking something that is GOOD, Medicare, which covers all aged Americans, and turning it over to the private sector to operate as a business where they get paid in advance and try to pay out as little as possible, is BAD. What we need is improved and expanded Medicare for All. Expanded means everyone in our country, not just seniors, are in the same plan; everyone from birth on has Medicare and we do not have a hodgepodge of different programs covering our population. All in it together. Improved means getting rid of all the negatives of the current TM program: paying for 100%, not 80% of approved charges, covering all necessary health issues including dental care, mental health care, and long-term care as well as glasses and hearing aids.

Wouldn’t this cost more? Well, cost whom? The outlay for actual health care for all those expanded and improved services would certainly be more, but the outlay for “health care” which includes profit for insurers, providers, and drug companies would be, for the government and for you out of pocket (unless you are extremely wealthy and can afford it) less. Think about that. Should money you pay, in taxes and out-of-pocket, for health care be used for providing health care to you and your fellow Americans, or should a major portion of it be used to generate huge profits for companies and pay their executives multi-million-dollar salaries?

Think about it.

*Another confusing thing. While Medicare Supplements (MediGap) plans are not as a group assigned a “Part” letter by Medicare, the various plans do have 10 different letter designations, A-D, F, G, K-N (no E, H-J). This is actually good and one of the very few rational and helpful things in US health insurance, as ALL plans of one letter have to offer exactly the same benefits; a K or an N plan from any insurer has to have the same benefits as from any other, so you can just choose the company by cost to you and service. Unfortunately, they do not get better or worse, or more or less comprehensive, as they progress through the alphabet; you have to read what each one covers. That would be asking too much!