Health
United Health Care profits soar 155 percent on Medicare plans
By Jerry Mazza
Online Journal Associate Editor


Sep 25, 2009, 00:20

United Health Care�s 155 percent profits on Medicare plans must be a company record, especially in a down economy, and an embarrassing fact, particularly as the concervatives on the Senate Finance Committee fight to preserve the present payment structure of United Health Care and its fellow private insurance companies.

Private insurance plans in Medicare cost up to 19 percent more than it would cost to care for the same people in the public Medicare program. But then, we know whose pockets the Republicans and Blue Dog Democrats are really stuffing.

And never mind, as the Medicare Rights Center points out, �Private plans came into the Medicare program with the claims that they could save taxpayers money.� Right and I�ve got a bridge in Brooklyn I can let you have for cheap. The fact is, �they [the Private Plans] cost between 12 percent and 19 percent more per person than the public Medicare program, amounting to $5 billion per year in over-fattened costs to taxpayers.�

I guess this must be the advantage in the Medicare Advantage plans, only it�s for United Health Care and friends not the USA and its taxpayers. In fact, as Families USA reported, �Overpayments to Medicare Advantage plans and those regional PPOs could easily cost more than $60 billion over the next 10 years . . .� Hey, piece of cake, right?

And as Families USA noted, �As part of the 2003 Medicare Modernization Act, Congress has substantially increased payments to Medicare Advantage plans. They�re overpaid in comparison to traditional Medicare.� Modernization, you understand, means privatization here, thanks to George Bush and now Barack Obama and Congress, God love them if she can.

For instance, in 2005, Medicare overpaid private plans by at least 7 percent per beneficiary. And you, Mr. and Mrs. Taxpayer, lost $2.7 billion in 2005 to private Medicare Advantage plans and their parent insurance companies. Then, in 2006, under a new payment formula [woo, woo], overpayments to plans were 11 percent per beneficiary (that is, after accounting for health care status). And now in 2009, up in the 19 percent range. Nothing like HMOs and PPOs saving us money.

See, they keep telling innocent seniors that they will suffer (even more) if they lose their Medicare Advantage plans. Don�t believe it, folks. Medicare Advantage plans can hurt people with Medicare. Two studies found that people could end up actually paying higher out-of-pocket costs in a private plan than in straight Medicare, or in one private plan over another. I mean, the minute you let those dogs in, they�re gonna bite you, not protect you.

A study by MedPac found that a share of Medicare private health plans have high cost-sharing for �nondiscretionary� services such as chemotherapy. Like say, looking at some of the costs for a 70-yer old male with advanced colon cancer, the study showed out-of-pocket charges of $7,100 for one plan, $6,500 for a second plan and $1,900 for a third plane. You�re rolling the dice for your life with all this razzle dazzle. So, buyer beware!

Another study, by the nonpartisan [could that be] Commonwealth Fund found that out-of-pocket costs for private health plan members vary widely not only by your plan benefit package but by your health status. The report says that costs for plan members in poor health are actually higher than public Medicare in 19 out of the 88 private Medicare Advantage (MA) plans looked at. �Despite the high payments, relative to fee-for-service [public Medicare] costs, that MA plans receive from Medicare to enrich enrollee benefits, these plans may not always be a good deal for sicker beneficiaries who use more health services.�

A little bit of backstory

Medicare, the federal health insurance program for people over the age of 65 and those with severe disabilities, contracts with private health insurance plans that compete with the public Medicare program for membership. So, you have a choice, and I would recommend staying away from the �Advantages.� You�re somewhat better off with the Medigap programs that simply fill in the holes, like co-pays, yearly deductibles, and allow you to go to whatever doctor you want to.

That said, according to the Kaiser Family foundation, here is a quick look at private plans in Medicare through 2006 . . .

�As the private market for health insurance has evolved, Medicare has been modified so that beneficiaries can elect to get their Medicare benefits through a qualified private plan rather than the traditional fee-for-service Medicare program. Authorized in 1982, the Medicare risk-contracting program provided for enrollment in health maintenance organizations (HMOs).

�In 1997, Congress expanded private plan authority to include preferred provider organizations (PPOs), provider-sponsored organizations (PSOs), and private fee-for-service (PFFS) plans as the Medicare risk-contracting program was absorbed into Medicare+Choice (M+C). The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) replaced M+C with the Medicare Advantage (MA) program in 2004, raising payment rates and making other changes in anticipation of the Medicare drug benefit in 2006.�

So you can see for yourself how the cats were let in the door under the guise of �modernization,� �improvement� and so on. Take note that the name changes for the private health plans went through as they contracted with Medicare. �Medicare risk-contracting program,� not so appetizing, became �Medicare+Choice,� tastier, to �Medicare Advantage.� Delicious! Now gimme some of that. I want my advantage.

Yeah, well, it�s time to put back the advantage where it belongs, in the hands of the folks with Medicare, not in the coffers of the fat cat insurance companies. Let Medicare plans compete if they want, say, even if we descend to a public option if or if . . . who knows . . . to rampant socialism . . . and a Single-Payer (America-Care as one writer proposed), if they dare. Yea! Though be prepared for some kind of goulash, with a little bit of this and little bit of that and a lot of it all for the private sector.