Medicare re-enrollment: Time to consider being dissatisfied with a new plan!

It is Medicare re-enrollment season again. It began Oct 15 and runs through the end of the year. This is when, if you are dissatisfied with the Medicare plan that you are in, you can choose a new plan with which to be dissatisfied. I know this, if for no other reason, by the large number of pieces of junk mail telling me of the joy I will have if I enroll in this-or-that Medicare Advantage (MA) plan, not to mention the commercials blanketing television programs. I almost only watch live TV for sports, so I am seeing these on sports shows; I don’t know what it means that sports show ads target seniors. Maybe it’s just that ads on all shows target seniors; it is presumed that we are sitting around doing nothing but watching television so are an audience not only for Medicare Advantage but all kinds of “health” ads, ranging from those for incredibly expensive recombinant-DNA drugs (anything ending in “ab”, for starters) for uncommon conditions to the touting of ineffective (and possibly dangerous) nostrums. At least we don’t see as many ads for mobility scooters “at no cost to you” (albeit to the taxpayers) since some of the vendors went to prison. Unless they are soon to be pardoned, not an impossibility.

There is only one form of real Medicare, “Traditional Medicare” or TM. This is what you paid those Medicare taxes for that were recorded on all your paychecks, to fund the Medicare Trust Fund. Well, at least for Medicare Part A, which covers inpatient care and is what is covered by the Medicare Trust Fund. Medicare Part B, covering outpatient care (including outpatient procedures) is funded by general taxes plus monthly payments from recipients that are graduated by income (based upon the previous year’s tax form, so for the coming year, 2026, based on your last filed return which was for 2024). The base payment this year is $185/month, although subsidies may be available for low-income people. But while TM (unlike MA) does cover you for all Medicare-approved treatment, and it, not the hospital, sets the charge, it does not cover all of what it permits the hospital to charge you. For inpatient care, in particular, it will only pay 80% of whatever it has approved as what a hospital can charge. That is, if Medicare has approved a charge of $1000 for procedure X, it will only pay the hospital $800, and you are on the hook for the rest. So (if you can afford it) you should buy a Medicare Supplement (Medigap) policy to cover that. There are several types, but at least they are standardized benefit packages (labeled by letters A-N, except E, I, and J; these letters not to be confused with the Medicare Parts A, B, C, D). In addition, you are required to have a drug plan (Medicare Part D), which is an additional expense.

Besides being confusing, that is a lot of expense for TM: monthly payments for Part B, Part D, and your Medigap. On top of that it doesn’t cover all the things you may need or want, like vision correction (glasses; it does cover treatment of eye diseases and surgery), or hearing aids. That facilitates the marketing of Medicare Advantage (officially Medicare Part C), as intended: one easy monthly payment (which, depending upon the MA plan, may be completely covered by Medicare without out-of-pocket payments from you) covers it all – inpatient, outpatient, drugs, and glasses, hearing aids and even gym memberships! Why would you not want this?

I have written previously why you may not want MA (The WiSER program to erode your Medicare coverage: Not WISE for you! Sept 22, 2025, Medicare and Medicaid at 60: Need more -- and more threatened -- than at 50!, Aug 6 2025, and other older posts), which boils down to the fact that they are health insurance plans like the one you had, and can, and do, delay and deny coverage for individuals in order to save money (or, really, make more money!) They usually are HMOs or PPOs with a limited panel of doctors and hospitals for which they will pay. While the Medigap and Part D coverage you need with TM are also sold by the same insurance companies, these benefits are much more explicitly stated and required by law to be provided, although there are certainly efforts to get you to use cheaper drugs (usually not the “ab” drugs being advertised in the next commercial!) If you travel a lot, you may find that MA plans are often based in one geographical area. Also, many “destination” hospitals that people travel to in order to receive excellent care for conditions like cancer (eg., Mayo, MD Anderson) do not accept MA. To a large extent, having an MA plan is like having the insurance that non-Medicare recipients have, warts and all. There are reports (such as in Health Care Un-Covered) that, in addition to raising their rates and cutting benefits, MA plans will be “exiting certain markets” (the unprofitable, or really less-profitable-than-they-would-like markets), leaving residents in those areas without available coverage.

"Health Care Un-Covered", the substack founded by Wendell Potter, also reports on the new report from Physicians for a National Health Program (PNHP) “No Real Choice: How Medicare Advantage fails seniors of color”, that shows MA plans increase (rather than decrease, as they claim) racial inequity.

PNHP’s researchers found that communities of color are being steered into MA plans not because they’re better — but because they’re cheaper upfront. This dynamic, dubbed the “Gap Trap,” means that affordability is driving people into coverage that often denies care, delays treatment and locks them into narrow networks.

The old “cheaper up front but not once you get sick” gambit.

Plus, from the PNHP study:

·       Black, Hispanic and Asian/Asian-American beneficiaries are disproportionately concentrated in MA plans that score lowest on quality ratings, while white beneficiaries are more likely to live in counties served by higher-quality plans.

·       One study found that MA prior authorization requests were denied 23% of the time for Black seniors vs. 15% for their white counterparts.

·       Despite industry claims to the contrary, racial and ethnic health disparities in the United States are not being reduced by Medicare Advantage.

·       Studies show that Black enrollees are more likely than white enrollees to choose a 5-star MA plan when offered one. They’re just not offered them as often.

·       Racial minority enrollees in MA suffer from worse clinical outcomes and face barriers accessing best quality care because of restrictive networks and misaligned financial incentives. Black MA enrollees experience higher rates of hospital readmission compared to their white peers.

When is having insurance worse than not having insurance?

And, while we’re talking about the insurance that people not yet on Medicare and not eligible for Medicaid (ie., most Americans) have, it is (you may have noticed) getting more costly. At the present time the government is shut down over disagreement between Democrats and Republicans (including the administration) as to whether subsidies that made enrollment in health insurance through the Affordable Care Act (ACA) actually affordable should be extended. For those who are fortunate enough to have employer-funded health insurance and do not have to buy plans through the ACA exchanges (154 million people), KFF (formerly the Kaiser Family Foundation) reports that covering a family of four now costs almost $27,000 a year, after two straight years of more than 6% increases, and 26% over 5 years. That is a lot, especially if the family is paying a hefty portion of it (often 50% or more) out of pocket.

It's not a good situation for people not yet on Medicare, not for those on Medicaid, not for those receiving subsidies to buy policies through the ACA, and increasingly difficult for those on Medicare or Medicare Advantage. How about we covering 100% of everything through Traditional Medicare, enroll every American of all ages in it, and fund it by not having to pay insurance companies?

Don't miss laughing at, and more important being informed by, this John Oliver video!

Being blown off by health care can cost you your life...

Dealing with corporations is hard. Robots answer your calls, but not your questions. They are programmed to give you the information the company wants you to have, not the answers you need. It is very difficult to ever find a “monitored” email address to write to. It is like they don’t want to hear from you (except in the ubiquitous and totally structured “tell us how we’re doing” requests). Charges (as I experienced recently) are posted to your credit card immediately. Refunds, even when they agree to one, can take 45 days (by policy).

People, on the other hand, are almost always good and helpful. If you have the time and patience and willingness to scream “representative” at the phone often enough to actually get one, they mostly are polite, empathic, and usually resolve your problem (unless such resolution is prohibited by company policy). At least they answer your questions. It is amazing but not surprising that companies make it so hard to get to them. After all, they may help you out. Which is not what the company wants; they want your money and you be gone! Robots are also cheaper, thus increasing profit (and unemployment).

And so it is with healthcare. In which case it can be a disaster. I don’t mean that the waste of your time and money with other corporations is ok, or even just bad, or that it cannot financially be a disaster. But in health care we are talking about the health and even lives of you and your family. If you can’t get hold of your health care providers, you can’t get seen and cared for, or get the information that you need to do what you need to do, or to be seen elsewhere. This is, again, not the fault of or the result of the actions of the actual people who care for you, who if you can get in to see them or speak to them on the phone are usually very helpful. It is the fault of the system that is structured to prevent you from getting to them, because less use by you results in more profit for them.

That, of course, is at the provider level. At the insurer level, we enter a whole new region of Bizarro World. You get insurance. You find a provider. You see your provider. They recommend a treatment plan. You agree. Now the insurance company, which has a policy requiring “prior authorization” for virtually everything, denies payment. There may not be a good, or even any, medical reason for denying payment, and, if you appeal, they may pay because, after all, there is good medical reason. But denial as a first line response is great -- for them. Most people don’t appeal. They often don’t know that they can, or how to. So, for the insurer, problem solved. Of course, their problem was that they were going to have to pay money, and now they don’t. Your problem? Not solved. And your problem was your health, treatment for your disease. Whoops.

Prior authorization is an effective tool used by insurers to not pay for your care. It is more ubiquitous in “managed care” plans (HMOs, PPOs) than in open insurance plans. Of course, the latter are getting much rarer. It is cheaper for your employer to enroll you in a managed care plan. (Noticing a theme here?) Medicaid the (almost always dreadfully inadequate) public state/federal partnership for covering the poor is mostly (41 states including DC) turned over to managed care. One of the last bastions for fee-for-service, Medicare (the federal insurance plan for the aged, blind, and disabled) is quickly moving in that direction, with over 50% of Medicare patients not enrolled in actual Medicare but rather in “Medicare Advantage” (sic) programs, essentially private HMO-type plans paid for with Medicare funds. Now Medicare patients too can experience the advantages of managed care (like eyeglasses and gym memberships) as well as the disadvantages (like limited provider networks and denials of payment when you actually get sick).

A lot of the burden on privately-insured patients is demonstrated in research by Sukreth A. Shashikumer et al. in Financial Burden of Health Care in the Privately Insured US Population,
JAMA Internal Medicine, May 28, 2024, and summarized in the Health Justice Monitor.  

Among low-income families, mean total health care spending was $3163 in 2007 and $3247 in 2019. Low-income families’ medical burden was 23.5% in 2007 and 26.4% in 2019.  Among higher-income families, mean total health care spending increased from $4071 in 2007 to $5239 in 2019. Higher-income families’ medical burden was 5.4% in 2007 and 6.5% in 2019.

It’s bad for everyone but is, as always, worse for lower income people. This is also described in detail in a recent article by the Associated Press’ Tom Murphy, “Being a patient is getting harder in a strained and complex US health care system” (June 2, 2024), which describes the direct negative impact of insurance company denials on people’s health. The article discusses how some coverage for patient navigators helps, but the core problem is that is in the interest of the insurer to not spend money. Some MA plans like to say that they are enhancing health equity by covering a lot of low-income and minority people. Of course, this is only because the up-front costs are less. Those people pay when they get sick not only with dollars (co-pays, deductibles) but with their health (limited networks, denial of care).

And the majority of Medicaid recipients are children, and they are not immune from being denied care by their insurance companies, as revealed in a report from the General Accounting Office (GAO) and described by Wendell Potter in his “Health Care Un-covered” substack. It reports that insurers use both prior authorization and denial of payment for services, called EPSDT (Early Prevention, Screening, Diagnosis and Treatment) that the law REQUIRES be provided!

Contrasting traditional (real) Medicare with Medicare Advantage is useful here. You pay into Medicare your whole working life. When you are old enough and receive it, traditional Medicare pays for the services you receive (with some important limits, mainly only 80% of hospitalizations, requiring a Medigap plan). Medicare Advantage however, receives the money for your care from Medicare up front. Their incentive, then, is to keep it, by spending as little as possible on your care. That’s it in a nutshell. It is described in more depth in the report from Physicians for a National Health Program (PNHP), “Taking Advantage: How corporate health insurers harm America’s seniors.”

It is awful how badly corporations treat people. The laws and regulations need to be changed, to require them to provide the goods and services they have been paid for, and to make access for concerns or complaints, including access to actual people, easy. But completely different rules need to be in place for healthcare. If I can’t get through to most companies until Monday, I can live with that. If my credit card company keeps me going through the hoops on the phone for a half hour or more before I can talk to a person, I am only wasting time. But if this happens when I am trying to access health care, I can get very sick or die! Waiting 6 hours to be seen in the ER is not the answer. Neither are prior authorization, denials, and delays, for sick children, vulnerable seniors, poor people, or any of us.

What can we do? Write and call our congresspeople and demand that they eliminate profit-making insurers from healthcare. Perhaps some are not stupid (believing what lobbyists tell them, such as that Medicare Advantage increases equity) or corrupt (gleefully accepting those lobbyists contributions) and actually care about the health of their constituents.

Tell them to sign on to the Improved and Expanded Medicare for All bills in the House (Pramila Jayapal and Debbie Dingell, primary sponsors) and Senate (Bernie Sanders), and to sign the Patients Over Profits pledge being promoted by National Nurses United and other organizations.

Or you won’t vote for them.

Private equity, private profit, Medicare and your health: They are incompatible

When recently scheduling a procedure with a physician, he just shook his head and told me how lucky I was to have retired, and how difficult the practice of medicine is now. Before the outpatient procedure, he had wanted me to get a consultation from a physician in another specialty, but it turned out that that group no longer saw outpatients but only did hospital consultations because they no longer had the capacity. From his perspective, the problem is lack of people, especially doctors and nurses.

 But there are other big reasons, which I have discussed in previous blog posts. There are different aspects to them, but they essentially boil down to the transformation of American healthcare into another profit-driven industry. My doctor, and the doctors he wanted to consult, and the nurses and other staff with whom they work, are all interested in providing high-quality and effective care to people. The corporations for which they work (or are forced to work with, such as hospitals) are interested in making money.

This transformation, like most, is incomplete, but it seems to have passed an inflection point from which, if something major is not done, there is no turning back. The changes have been in process for a long time, documented in books such as the Health Policy Advisory Center (HealthPAC)’s 1971 “The American Health Empire” (Barbara Ehrenreich and others), and Paul Starr’s “The Social Transformation of American Medicine” published in 1982. They document the change from a cottage industry of independent doctors to one dominated by large institutional players. In the 1980s, Physicians for a National Health Program (PHNP) was created with the goal of, if not reversing this trend, at least harnessing the system to serve all of our people through the creation of a centrally-financed single-payer health insurance system. While every other wealthy (and many non-wealthy) countries in the world have such coverage, the US is the outlier. PNHP has advocated for decades for a coverage system more like that of Canada, where provincially-run financing plans cover everyone under a set of rules set by the federal government.

At that time, and today, a huge part of the problem was, and is health insurance companies. They are the obvious predators, drawing profit from ‘managing’, which often means restricting, your access to health care. Insurance in general makes money when it takes in more than it pays out, and as customers we “win” when we lose. That is, we collect when we have a car accident, or our house catches fire, or we die. We bet against ourselves, and hope we will not need the insurance. But health care is different, because we want to receive it. To be paid by insurance may have made sense in the early days, when it covered the hopefully-unneeded hospitalization or surgery (“major medical”, it was called) and we paid doctors out of our pockets or in chickens. But it makes no sense for routine and necessary health care.

The other big abuser back then was pharmaceutical companies, which made even more than insurance companies, marking up prices to whatever the market would bear, no matter how many people were left out and could not afford them. Sadly, the news is not that the character, behavior or profit taking by insurance or pharmaceutical companies has improved; now they are both even worse! What is sad, and terrible, is that the actual health care providers have become more predatory, and more often owned and controlled by companies whose primary business is making money, and only incidentally providing health care. I have written about this sort of abuse by hospitals and corporate-controlled physician groups, and it has just scratched the surface.

Recently, the Kaiser Family Foundation Health News reported on ‘Sick Profit: Investigating Private Equity’s Stealthy Takeover of Health Care Across Cities and Specialties’, exposing once again the way in which for-profit companies, and increasingly private equity, have bought up healthcare practices and limited access or worse in the name of making money. The article leads with the story of a 2-year old child in Yuma, AZ who died of complications of anesthesia while receiving extensive dental work that, his parents say in a lawsuit, was unnecessary (it almost certain was). They charge that the dentists were pressured by the private equity firm that owns the practice to do the maximum number of procedures on children with Medicaid to maximize revenue and profit. But that is just the lede; the article documents the increasing frequency of practices owned by for-profit companies abusing and sometimes killing people, either by over or under treatment. Which one depends on which will make the most money, not on whether folks need medical care or not.

Killing children in pursuit of profit is something most of us would frown upon, but while all practices owned by private equity or other profit-making entities may not behave so badly, it would be a mistake to call those that do “bad actors” and excuse the others. It is the entire concept that YOUR health should be a source of profit, and be attractive to the venture capitalists investing in these practices because they can make so much money. The money, whether paid by you directly, or indirectly through your insurance premiums, or by the government through your taxes, should be going toward your healthcare, not their private jets.

This practice complements the impending takeover of Medicare by for-profit Medicare “Advantage"”plans, and private-equity controlled ACO/REACH plans, just recently reported on in the New York Times, “Corporate Giants Buy Up Primary Care Practices at Rapid Pace”. The article begins by noting the shortage of primary care doctors, and that it is getting worse (also something I have written about often) because they get little respect and less money (than other specialists). It would be nice to think that this evidence of the impact of family doctors and other primary care clinicians on patients was a sign of respect, but it is just a sign of greed, especially through the programs that privatize your Medicare. This represents a huge potential profit center for these companies. “That’s the big pot of money everyone is aiming at.” Yup. It’s $400 billion!

This is why most of us who are paying attention agree that we now need to go much farther than simply national universal health insurance. While that is important and good, it could end up being another vehicle for profit-taking; remember the Yuma dentists were ripping off Medicaid, a government funded program. Thus, only a truly non-profit (unlike the ostensibly “not-for-profit” hospital sector than emulates for-profit competitors to maximize revenue) is acceptable. Steffi Woolhandler and David Himmelstein, founders of PNHP, call for such a national health service in a recent interview in Jacobin, and it makes sense.

The justification cited by these companies for their rapacity is that they increase efficiency. This is of course, BS. Efficiency in generation of more money for them, perhaps, by cutting back the number of doctors, nurses, and other staff, overworking those who remain, and making them all, along with their patients, miserable. That is not efficiency in production of healthcare, and is certainly not efficacy.

Doctors and nurses are being “sped up” as if they were on an assembly line, and are burning out and leaving in droves. The people who are the “products” are getting 7 minute visits, don’t have time to even talk about their problems not to mention get adequately treated. It is bad for everyone but those few earning the profit.

The Times article says “The companies say these new arrangements will bring better, more coordinated care for patients, but some experts warn the consolidation will lead to higher prices and systems driven by the quest for profits, not patients’ welfare.” Yup. That’s what they say. Not to put too fine a point on it, it is a self-serving lie.

We need one system, well-funded, to handle all of our needs, generously paid for without a cent going to private profit.

Direct Contracting Entities: Scamming Medicare and you and bad for your health!

On October 25, 2021 I wrote about ‘Medicare Advantage, Direct Contracting Entities, and other scams to transfer your money to insurance companies’. In the interim, it has become clear that the impact, and even existence, of DCEs is not well known among Medicare recipients, physicians, members of Congress, and many policy analysts. Indeed, it involves a lot more than insurance companies, particularly “private equity” (a newish term for “venture capitalists” including hedge funds, that maybe sounds better). While DCEs are still an ‘experimental’ program by the Centers for Medicare and Medicaid Innovation (CMMI) it is significant that the Biden administration has continued this Trump-initiated policy. As, presumably, part of its experimental nature, it has not had much publicity; few Medicare recipients know about it and it is just getting known to Congress, particularly with Senate Finance Committee hearings on February 2, 2022. It is probably worth calling attention to again, even if this piece repeats some of what I wrote in October.

Medicare was established in 1965, and the first two cards were issued, by President Johnson, at the Truman Library in Independence, MO to Harry and Bess Truman, in recognition of Truman’s efforts to pass national health insurance during his presidency. It meant that for the first time in American history, older adults would not suffer and die just because they could not afford medical care. It remains, along with Social Security, the most popular program in the US, in every poll, by almost everyone (except of course the rich elites, who believe the best programs are the ones that funnel money directly into their pockets, but more on that later).

Medicare has been a rousing success, but there are two problems. The real and serious problem, as seen from the point of view of Medicare recipients, or for that matter anyone who claims to be a decent non-narcissistic human being, is that it does not comprehensively over health care costs. For starters, there are several important health conditions it does not cover, including vision, hearing, and long-term care. Also, even for the conditions (most hospitalizations and office visits) it does cover, it does not cover the entire cost. Generally, for hospitalization, it covers 80% of the Medicare-approved fee (which is always less than hospital charges, but which is in fact all the hospital can charge Medicare patients). This puts patients on the hook for the other 20%, which as anyone who has been hospitalized knows can be a lot of money.

The other problem, perceived as egregious by the small but powerful group of very wealthy investors (not regular people at all) is the same as with all effective government programs: it doesn’t put money in their pockets. Medicare is funded by different sources; Part A is for hospitalization and comes from the Medicare tax on your paycheck. Part B is for outpatient care and is funded from general revenue funds, plus a monthly charge to Medicare recipients (a minimum of about $135 now, which can go quite a bit higher for high-income people and be waived for low income). Part D is the drug plan that each recipient is required to buy. We’ll talk about Part C later.

Medicare, as a public (government) program that is in the business of paying for health care rather than generating shareholder profit operates very efficiently, with about a 2% overhead for administrative costs. As a taxpayer, I’d think this is good. But for the small number of powerful wealthy investors (for short, let’s call them GNPs, for Greedy Narcissistic Pukes) it represents an opportunity; if they could control it they could reap profit from it!

So, of course, while the fact that it is not making rich people even richer is not a problem for most of us, the problem we have is the solution that the government has come up with in service to the GNPs. It has been regularly altering Medicare to help them make money from it. First Congress created Medicare Part C, or Medicare Advantage (MA), which, if you choose it, basically enrolls you in an HMO. You get everything paid for plus other stuff that traditional Medicare (TM) doesn’t cover, like hearing and dental and maybe gym memberships. This is good for you provided you don’t get sick. If you do, you don’t have the choice of virtually all doctors and hospitals that you do with TM, just those “in network” (an even greater problem if you don’t spend all your time in the same area, since those networks are geographic). Also, since, if you are sick, those MA programs would just as soon you left went to TM so  they don’t have to pay your bills, and they have a variety of tricks to encourage you to do so. MA may be good for basically healthy seniors, unless they travel, until they’re not healthy. MA plans also don’t pay for long-term care – that’s expensive and would cost too much; gym memberships are cheap. And they can – and do -- pocket overhead and profits of up to 15%. (The insurance term is that their “medical loss ratio” -- the amount that they have to spend on actually providing medical care – has to be 85%, while in TM with its 2% overhead, it is effectively 98%.) Medicare Part D, the required drug coverage was another gift, this time to big pharmacies and pharmacy benefit managers (PBMs) who make big profit from them.

But wait! A lot of people were and are still choosing TM, and not all of them are the high-cost really sick people that the MA plans don’t want! While the insurance companies and GNPs are glad that they are in TM when they are sick and costly, there are still a lot of them who we could make money on. How can we do that? Well, let’s get the Center for Medicare and Medicaid Innovation (CMMI), which is supposed to come up with innovative programs that improve quality and save the government money, to implement an “innovation” that lets us pocket money from even those who chose TM! Cool! So they did, without even having to have Congress approved it. These are called Direct Contracting Entities (DCEs). If your primary care clinician is affiliated with a DCE, the DCE collects all your money from Medicare, and – this is a really good part – they only have a medical loss ratio requirement of 60%, so they can keep 40% if they can deny you enough care! A better deal (for them!) than even Medicare Advantage! And since most primary care physicians are now employees or part of large groups, the DCEs can just contract with the group, not with each physician. And even better, the DCEs, the majority of which are now owned by “private equity” (a particularly noxious form of GNP), can just buy the primary care groups! Voilà! The group is now owned by the DCE, your doctor is part of it, and you are part of it and being hosed. Your only recourse is to change your primary care doctor. Which you may not want to because you may like and trust your doctor…

Of course, the two problems I mentioned are mirror images of each other. Medicare does not pay for all your care because Congresspeople and Wise Policy Analysts say that would be bad because it would cost too much. They see it as much better to spend lots of money on further enriching the insurance companies, PBNs, DCEs, and other GNPs. Why? Because they contribute a lot of money to Congress, and because many congresspeople are heavily invested in these; often they are also GNPs, either before entering Congress or as a result of it (how they get so rich on a Congressional salary is another story).

By the way, in case I haven’t been clear in what I think, these are all both bad and evil programs, taking money that should be spent on your healthcare. They are healthcare examples of the impact of “gangster capitalism”, or in another term I’ve heard, Götterdämmerung capitalism, which describes our current situation where the GNPs would rather destroy the world that stop acquiring all its wealth. And if they are willing to destroy the world, how much weight do you think your health and life have? These programs are not developed by accident; they are purposely designed to take what you have (as in the cost of health insurance premiums) or have previously been recognized as social benefits (as Medicare) and transfer them to the richest people in society.

The only – maybe, hopefully -- good news is that Congress has recently started holding hearings on DCEs, recently by the Senate Finance Committee, with outstanding testimony by many experts including Dr. Susan Rogers, current president of Physicians for a National Health Program (PNHP), whose website has lots of good information on DCEs. At the end of the hearing, Sen. Elizabeth Warren (D, MA) urged the Biden administration in the strongest terms to have CMMI end this “innovative experiment” (or perhaps you prefer grift or scam). Maybe they will.

Let your Congresspeople know what you think. And everyone else.

Medicare Advantage, Direct Contracting Entities, and other scams to transfer your money to insurance companies

In my post DTC Advertising on TV illustrates the corruption and inequity of the US medical care system (March 6, 2021) I talked a little about advertisements for Medicare Advantage (MA), an alternative to traditional Medicare (TM, not ™) that involves an insurance company taking over your Medicare and you maybe paying additional money to, essentially, be enrolled in their HMO or PPO, with its concomitant advantages and disadvantages to you personally. Advantages include a variety of additional services that are not currently included in TM (they should be, but this is a different issue), such as vision care (or at least glasses), hearing aids, and sometimes dental care. This can save you money. The disadvantages are, essentially, the same as those for any HMO or PPO – a limited “network” of physicians and hospitals (and big charges for which you are liable if you go out of network) and, related to that, a limited geographic area in which your network applies. This is not generally a big issue for the occasional traveler (emergencies are usually covered) but can be a big problem for those who split their time between two or more areas. Plus, it doesn’t protect you from “surprise medical bills”, as they are called in Congress (which discusses them but has yet to enact anything to protect you from them). These occur when, while both your doctor and hospital are “in network”, someone else --  the ambulance company, some doctors caring for you (say, the group that staffs the Emergency Department, or the surgeon assisting your surgeon) are not. They can – and do – then send you big bills. This should be a caution.

Why I am bringing this up again now is that the pace and frequency of solicitations for people to abandon TM and enroll in MA have greatly accelerated because we have entered the “open enrollment” period, when people with Medicare can change their insurer or plan type, and the MA plans, mostly owned by insurance companies, really want you*. This is why in addition to adding more former NFL quarterbacks to their ads (Joe Theismann, who is only my age, joins the 78-year-old Joe Namath), you have (if you are of Medicare age) been getting dozens of information packets in your mail for the plans available in your area – almost all of which pick names and design their envelopes and otherwise do their best to make it look as if they are official and from Medicare (I was going to share the link to one with a name that prominently features “Medicare”, but I figured why advertise them?)  They’re not. And they’re being successful. As documented by the Kaiser Family Foundation, MA plans had an 8% increase from 2018 to 2019 and a 15% increase from 2019 to 2020. Advertising really pays off! And, boy, does it pay! Thanks to your generosity (well, Congress’ generosity, on your behalf, or at least using your money) MA plans (and, by the way, “Medicare Advantage” is the official term specified in the legislation, in case you had any doubts about the influence of insurance companies over Congress) get paid a lot more than the government pays on your behalf to TM. For starters, their administrative overhead – comparable to that of most private insurers – is about 13.2%. Is that a lot? Well, the overhead for TM is about 1.8%! Some sources have cited the overhead for “Medicare” as about 3% -- still a lot better – but that is because it is combining the two. And, of course, as MA increases as a share of Medicare that figure will continue to rise.

MEDPAC, the Medicare Payment Advisory Commission, an independent agency created by the federal government to monitor and recommend on issues related to Medicare, notes that MA plans receive more money from Medicare but spend less on providing patient care to their members, costing Medicare an additional $8B. So it is definitely worth pursuing your business! Unless, of course, and this was the reason for the asterisk (*) above following really want you, you are sick. Then you would cost them money, and they would rather that you switch to regular TM. Which would be better for you, of course, but it would have been better for you to have never been in MA. This is a core part of their business strategy: attracting healthy seniors who will not cost them much money with the lure of cheap glasses and hearing aids and such (“cherry picking”) and then getting rid of those beneficiaries who really get sick and would cost them a lot of money (“lemon dropping”). All this is an effort to improve their “Medical Loss Ratio”, which is to say decrease the % of the money that they collect which they have to spend on actually taking care of you. If it sounds weird or offensive (and it is both) that their spending money on what they are supposed to be in the business of doing is called “loss”, it is a term that comes from the overall insurance industry. The % of homeowner’s premiums that have to be paid out to clients because their homes burn down, or auto insurance premiums that have to be paid if you are in a car wreck, is called the loss ratio. Of course, you don’t expect (and certainly don’t hope) to be in a car wreck or have your house burn down, but you do (or should) expect to receive medical care. Indeed, a more apt comparison to your house burning down might be made to “major medical” – coverage for costly hospitalizations – but in fact most people will need those if they live long enough. Much more about the cost of MA and the reasons for it can be found in the Health Affairs Blog posts of September 29 (Medicare Advantage, Direct Contracting, And The Medicare ‘Money Machine,’ Part 1: The Risk-Score Game), and 30 (Medicare Advantage, Direct Contracting, And The Medicare ‘Money Machine,’ Part 2: Building On The ACO Model) by Rick Gilfilan and former CMS administrator Donald Berwick. Another article on MA can be found in Consumer Reports.

Since not everyone who would be a good health risk is forgoing TM for MA, a new scam (excuse me, option!) has been developed by CMMI, the Centers for Medicare and Medicaid Innovation, a branch of CMS, the Center for Medicare and Medicaid Services, which has been granted authority to implement such changes as they (or the insurance company lobbyists) can come up with without needing further Congressional approval. This one is Direct Contracting Entities (DCEs). A company, particularly a health system or medical group, may send people a complicated letter telling them that (for their benefit!) the group has enrolled them in a DCE. The client has the choice to opt out, but this is disguised in complex legal language, and the benefits(!) are so strongly sold, that many people do not.  Remember, this is not being sent to folks who are in MA, but those who have purposely and specifically chosen TM and NOT MA. Thus, they are not expecting that their providers will try to enroll them, backdoor, in a plan that, while it has benefits(!) – like those of MA – also lets insurance companies (wait, how di I get to an insurance company? I thought I was in TM!) collect a lot more money from CMS – like under MA! What a cool idea! If you resist MA because you are more concerned about your healthcare than insurance company profits, CMMI will find a way to allow you to help the insurance companies anyway! A lot more can be learned from a short (15 minute) youtube presentation by PNHP (Physician’s for a National Health  Plan) member Ana Malinow.

Medicare, along with its parent, Social Security, is the most popular government program in the nation, and for good reason. It actually provides important benefits to the taxpaying American people. Instead of paying out lots of extra money to Wall St. and insurance companies, Congress should expand the benefits available under TM to include all necessary health care, including dental care, vision care, and hearing care. Instead of forbidding Medicare to negotiate drug prices with BigPharma and the Pharmacy Benefits Mangers (PBMs) that control access to drugs, Congress should ENCOURAGE and REQUIRE it. Finally, it should extend all these Medicare benefits to EVERYONE in the country, not just the elderly and disabled.

This would be what the American people need.  But if you want to have this, you are going to need to shout it from the rooftops – and write letters to Congress -- to be heard over the sound of cash flowing from insurance companies into your Congresspeople’s pockets.

Then go to pnhp.org and sign the petition asking Sec. Becerra to close the DCE program!