The WiSER program to erode your Medicare coverage: Not WISE for you!

While much about American health insurance is infuriating, starting with it treating the healthcare system as a vehicle for making money rather than providing healthcare, “prior authorization” (PA) is one of its most infuriating, and dangerous, practices. It means that before you can get the treatment your physician has recommended, indeed often before you can see the physician you want, the insurance company must authorize it. This practice is ubiquitous in commercial health insurance, including “Medicare Advantage” (MA), a program that allow an insurance company to collect the money allocated for you by Medicare. This means that if you receive a terrible diagnosis, such as lung cancer and your oncologist recommends a specific treatment, it is entirely possible that they will deny coverage for it, especially if your cancer is rare, or requires an expensive drug. You can file an appeal, but even if it is eventually granted, the process takes time, and meanwhile you are sick and your cancer is advancing.

But if you have Traditional Medicare (TM), this has not been a problem. TM covers virtually all doctors and hospitals in the country, covers most treatments, and does not subject the individual to PA, or decide that another (usually cheaper and possibly less effective) treatment, or even no treatment might be better for you. Or that a different doctor or hospital that is “in network” (for them) would be a better choice even if their track record is inferior. The absence of PA is a major reason why many health experts recommend TM over MA. 

Back in January, 2023 I wrote about the proposed ACO/REACH program at CMS (Privatizing Medicare through "Medicare Advantage" and REACH: The Wrong Way to Go!), which would allow companies (many owned by private equity) to purchase primary care practices, and voilà!, all those doctors’ patients were now in the company’s ACO and subject to restrictions on their care, including PA, without having to do anything at all and thinking they were safe because they were in TM! The REACH name was dropped but the program still continues; a friend in northern NJ was just informed he is now part of an ACO because they have acquired his doctor’s practice!

And other assaults on TM and the patients it covers continue. If you live in Arizona, as I do, or in 5 other states (New Jersey, Ohio, Oklahoma, Texas, Washington), even if you have TM you will suffer the indignity and damage of PA as Medicare implements a 6-year “pilot program” called WiSER (Wasteful and Inappropriate Services Reduction). No longer will you be able to get any Medicare-approved procedure from any Medicare-accepting doctor at any Medicare-accepting hospital (ie, virtually all doctors and hospitals). Medicare will contract with private companies that will utilize artificial intelligence (AI) algorithms to decide whether you can get the treatment. As with ACO/REACH, you have no choice, as participation is “voluntary” by state, but not by individual Medicare recipient. Actually, then it is worse than ACO/REACH, which you could get out of by changing your primary care physician (provided you could find another one!); WiSER will require you to move out of state!

Maybe the AI algorithms know better than you or your doctor. After all, isn’t reducing wasteful and inappropriate services a good thing? If you believe that the high cost of health care is the result of your using inappropriate and wasteful services, you might want to consider that the companies Medicare contracts with to do the PA will be paid “based on a share of averted expenditures.” That is, they will be paid on commission, receiving a percentage of the money saved by denying your care! But that won’t affect their decisions at all, right?

In reality, the use of “inappropriate and wasteful services” by you and your family and friends is not the reason for the high cost of health care. The reason is the enormous administrative costs of the US healthcare system, including the huge amounts made by for-profit insurance companies and pharmaceutical companies (and the eight-figure salaries of their CEOs and other executives), as well as health care providers (hospitals and health systems and the physicians, usually employed by them). This is a system found nowhere else among wealthy countries, every single other one of which comprehensively covers the care of all their people at much lower per-capita cost.

Bringing PA into Medicare is not “wiser”. It is the exactly wrong way to go. What we need is the expansion of Medicare to include everyone in the US, birth to death, and the improvement of that system by covering all health needs, including mental, dental, hearing, vision, and eliminating the 20% hospital co-pay Medicare recipients now are responsible for (and must buy Medigap insurance to cover). The “administrative costs” now being taken out of the “healthcare” system by companies would more than pay for it.

We would then have a system designed to provide health care for the American people, not profit for corporations. Imagine that!

 

adapted from a piece originally written to be a guest essay in the Arizona Star, but not published 

Medicare Advantage: OK, it's bad for the country, but what about for me?

Among others (see a recent discussion by Dr. Donald Frey), I have written about the problems with Medicare Advantage, also known as Medicare “Part C”  ("Private Equity": Profiteers in nursing homes, Medicare Advantage, DCEs, and all of healthcare, Sept 16, 2022 and Medicare Advantage plans, CMS, and providing high-quality care to -- and care for -- all people, Nov 21, 2015.) We have all observed that while such plans might benefit some individuals, they are a bad thing societally and in terms of overall cost. They are over-subsidized by the government, with that subsidy going to profit, not to you. Essentially, they are based upon the idea that privatization is a good thing, a concept often based on the erroneous idea that privatization is efficient and saves money. Well, in general, it does make money. For the private contractor.

However, lately I have spoken with several friends and relatives, some of whom have read these blogs, who are wondering if they might be people for whom a Medicare Advantage (MA) plan could be good. So I thought I would write about some of the considerations in making a decision about initially enrolling in or changing to or from MA or Traditional Medicare (TM). 

The first thing to remember is that most MA plans are run by profit-making insurance companies (some are still non-profits, although they often act much like for-profits). This informs all the rest of it. They take your (or usually the government’s, thus also yours) money and enroll you in a plan that is basically an HMO, with many of the same advantages and disadvantages.  The advantages including covering most or all of the cost of your care (TM only covers 80%) -- when the MA plan decided that it will it cover it at all. MA plans also come with extra perks or benefits that TM does not, e.g., dental, vision, hearing – sometimes, although these benefits are usually quite minimal. The disadvantages to the individual are mainly two: limited networks and discretionary coverage. Limited networks mean that only some doctors and hospitals are covered fully, and if you use others (“out-of-network”) they cover less (and you pay more); in some cases, they cover nothing. It can also lead to “surprise medical bills” when you go to a hospital in your network, and receive care from a doctor in your network, but also receive care from doctors not in your network. They can be from an ER or anesthesiology or radiology group with which the hospital contracts, or the assistant surgeon who is not in network even though your primary surgeon is. Politicians talk a lot about addressing this. (They talk about a lot of things.) Also, of course, such networks are usually geographical, and you may not be covered if your are in a different area except for (what they, not you, define as) an emergency.

Even if politicians actually get it together to make such surprise medical bills prohibited, it leaves the main disadvantage with MA – that they are mostly run by insurance companies and don’t always cover what you think they should or even what you thought that they said they would. They may cover a procedure sometimes, but not now, or for you. They might argue that it is not medically necessary (and maybe it isn’t) but it can also often be denied on a technicality (you didn’t tell us you had hay fever as a child!). Like health insurance companies always do, MA can also routinely issue denials. Even if they may eventually cover the bill, it can take a lot of appeals, and cost time and effort, and they (correctly) think that a lot of folks won’t go to all that trouble. They often require prior authorization – your doctor has to ask their permission to do something -- and it may take a long time for that approval to come, if it ever does. And you may be getting sicker. The things that are most often denied or delayed are, unsurprisingly, the most expensive things. Among those expensive things are surgery and cancer treatment. Delays in receiving those can be damaging to your health.

In contrast, TM covers what it covers, for everyone who has it, wherever they are (as long as the doctors and hospitals accept Medicare, which the vast majority do). It does not underwrite, and does not make decisions about which TM recipients can get a treatment. It has a schedule for what it pays, not based on what the hospital charges, and it pays 80% of that for inpatients. So, for example, a hospital might bill $10,000 for a certain procedure but the Medicare schedule says it pays $5,000. It pays 80% of that ($4,000) and you are on the hook for the other $1,000 (which is why TM recipients should have Medicare Supplemental Insurance)  but the hospital cannot bill you or anyone for anything above the Medicare-approved $5,000.

So what are questions you might ask yourself in deciding between TM and MA? The first one is “am I sick or might I need medical care?”. The answer is YES. Even if you have “never been sick a day in your life” and your forebears all lived until 105, you might. If you are on Medicare you are old (or disabled). Even if you eat healthful food and take lots of natural supplements and run marathons or ride your bike 100 miles a week, things happen. You can be hit by a car (lots of cyclists and pedestrians are). Or be in a car wreck. Or have your first heart attack, or be diagnosed with cancer, or need surgery. This is WHY there is Medicare in the first place! Then think about whether you want the ability to choose where and from whom you get your care. Are the local doctors and hospitals in the network the ones you would prefer? Do you think you might ever want to go out of town for treatment at a place that has (or you think, or have been told, has) the best treatment for your disease? Do you travel a lot, or even more important, spend a significant period of the year at a second residence, outside the geographic area of the MA network?

How much risk do you want to take that an insurance company will deny diagnostic tests or treatment? How much time and energy do you want to spend fighting with them (especially when you are sick)? What if they continue to say no? Lawsuit? Is that how you wish to spend your time and money? And they could win (see: fine print). How much are the additional perks worth to you? Glasses? Gym memberships? Others? How do they weigh against the potential costs of treatment for major diseases? And what about mental or behavioral health coverage?

It is important to note that TM is far from perfect. As noted above, it only covers 80% of what it decides is the appropriate payment. Maybe not too bad for a $100 procedure (if you can find one), but can certainly be a problem if it is a $5,000 or $50,000 or $100,000 bill. So you probably will need that Medicare Supplement policy. Plus it doesn’t cover glasses, or hearing aids, or nursing homes, or much mental health (or gym memberships). And there may be some other things that you want that it doesn’t cover. But it does cover you anywhere and with almost any provider.

MA plans often cover some of the things that TM doesn’t, and can include no co-pays. Indeed, the reason they offer things like gym memberships is that they want HEALTHY seniors, for whom they get paid by the government and for whom they don’t have to lay out a lot of money (which insurance companies call the medical loss ratio). In fact, when you do get really sick and need a lot of surgery or cancer drugs they may urge you to consider going back to TM, as you have become a “cost center” instead of a “profit center”.

Traditional Medicare should be improved. It should cover 100%, not 80%, of hospital costs. It should cover all healthcare needs, including vision, hearing, dental, mental health. It should cost you nothing additional out of pocket. The reason this is unlikely to happen, however, is that would make it clearly more attractive than MA, and insurance companies would make less money.

In any case, you can think about what the risks and benefits of an MA plan vs TM are for you as you make your decision.