Medicare DIS-Advantage Part I

Can we please re-name these privately administrated plans for the elderly “Medicare Disadvantage”?

If you thought that Medicare Part D was a hand out to private payors, you should be reading about Medicare Advantage plans. These plans basically entice seniors to forego coverage in traditional Medicare (Part A) and “MediGap” supplemental insurance (Part B) for a privately-run HMO-type plan that may have a lower premium, but can end up costing far more in the long run because of coverage restrictions, high co-payments, and benefit maximums and ceilings. Stranger still, these plans are subsidized by the government, but Medicare Advantage plans cost more per year per person on the plan than traditional Medicare costs.

The Government Accountability Office has estimated we will spend $54 billion more because of these plans than we would spend if the same people were covered by Medicare from 2009 to 2012.

Think it can’t get worse? Think again. These private plans spend about 13% of their revenue on administration of the plans, including marketing and profits. Medicare doesn’t market, and it doesn’t profit. Medicare also spends a reasonable 2% on adminstration.

The cost to taxpayers and the government is just one disadvantage of Medicare Advantage plans… they also shortchange those who enroll in the plans. More next time…