I found this article written by the Kaiser Health News on the Philadelphia Inquirer website (philly.com).
I’ve agrued for a while that the $177 Billion in cuts to Medicare Advantage will not come primarily from the coffers of the insurance companies, but rather, from the pocketbooks of the members of the Medicare Advantage plans. I think it’s a worthwhile debate to argue over whether it is fair that the 11 million members of Medicare Advantage should get a better deal than those on Original Medicare, but to argue that this is just a “giveaway to insurance companies” is, frankly, not accurate. (As an aside, if the $177 billion in Medicare Advantage cuts would be “reinvested” back into the Medicare Trust Fund, I think that would be a reasonable argument, unfortunately, the $177 billion is not going back into Medicare, but is being used to fund universal healthcare.)
The article provides a bit more proof. If you look about 3/4 of the way through the article you find this quote: “Medicare Advantage plans made a $3.3 billion profit in 2006, according to a report by the Government Accountability Office last year.”
Doing a little quick math, if the profit in 2006 was $3.3 billion, let’s assume the profit jumped to $5.0 billion in 2009 (due to membership growth and increased payments). If we forget about the fact that about 1/3 of this would be returned to the Federal coffers in via Federal taxes, we can use $5.0 billion over 10 years means that insurance company’s profits would be $50 billion over 10 years.
So, the profit is $50 billion, but the plan is to cut $177 billion?? Where is the other $127 billion in cuts coming from?
The useful message
Medicare Advantage provides a real benefit for seniors and the only losers in the cuts will be low and middle income seniors on a tight budget. Others will be able to afford the increased MA premiums or move to a Medigap.
Fortunately, we have the BEST health care in the world. Nobody is going to Canada or Costa Rica to get better health care. Unfortunately there are some cost issues, not care issues.
Individuals who post about health rankings should first read the reports they reference. I have. If they did they would know that overall the U.S. has the BEST health care in the world. Albeit not the lowest cost, which is the basis for the WHO report.
What about those on Med. Adv. who are disabled, under 65 and live in a state where you are not allowed to get a Medicap policy? I wonder if these individuals will slip through the gap.
I am an insurance agent and I work mainly with Medicare Supplements and Medicare Advantage. The best coverage is Orginal Medicare plus a Medicare Supplement. With a plan F Med Supp, a person would have no co-pays for medical services covered by Medicare. Medicare pays first and the supplement pays the balance. In Arizona, United of Omaha offers Plan F Med Supp for $90 per month.
A Medicare Advantage plan might have a zero premium, but co-pays can add up. Don’t get cancer or you’ll pay 20% of the radiation and chemo costs.
Doctors do no get to negotiate with Medicare. They do get to negotiate with insurance companies – if they belong to a big enough group. Mass General in Boston parterned with another hospital there and were able to tell insurance companies what THEY wanted to be paid. So much for cost control through insurance companies.
Why should health care be for profit? Insurance companies provide no real value but have overhead costs that take up 20% or more of premiums. This money could be used to pay for health care. Our system is really stupid and we are the joke of the industrialized world. We rank behind Costa Rica for life expectancy or some metric. I read somewhere that Norway is considered the country with the most freedom. They have socialized medicine and yet they are not ruled by tyrants and dictators.
But don’t worry, nothing will change and insurance companies will continue to be the bureaucrat between you and your doctor – and not government.
I do not live in AZ.. Here, our Medicare Supps start at $100-150 a month premium. The Advantage plans are so much cheaper. Also, with that type of monthly premium, it is to the customers advantage to go with an Advantage plan, because the hospital stay is a one time fee per visit if something should happen to them.. So in the mean time, if nothing does happen, then they have saved all that premium for every year they did not have to pay the monthly out of pocket expense. Yes they get no bill with a med supp plan, however they also pay a high premium per month verses an Advantage plan.
Some doctors here are not taking ANY insurance plans. They set their price and you have to take your bill to the insurance company as an out of network doctor to get paid back. I cannot speak for your situation because I’m not there.
What in this world, not just America, is a true not for profit company.. How could they pay for the buiding in which the run, pay for the electric, or buy the supplies. They have to make a profit to pay the people for the work they do. Our Government is the best not for profit company. We are so indebt that our Great Grand children will not be able to get out of it. Where would the insentive be to preform better, do a better job, or even take care of oneself if there is no need for it? I’m sure that you are a not for profit agent.
I was told today that Insurance agents are the reason we are in the mess we are. That taking them away would drastically cut the cost for insurance companies. That it will also save the customer from not knowing what plan they should pick. That from a state rep..
If you believe that the government will not do the same thing, then why does Original Medicare need to have a supplement plan sold and have an Rx plan sold as well? Because Original Medicare in the base form is not a good plan. It is a catastrophic plan, and a poor one at that.
How about the rising costs that we have to pay for because of government fraud that we will never see the end of in our life time? When was there a plan that the Government started that worked the way they said it would? Whatever they said it was going to cost generally is double the estimate or more! Switching to the Public option, do you know that the current plan has a $5000 deductible for and individual and $10,000 for a family? There are not many people in our area that would be able afford even that. Which brings us back to Original Medicare. If the government really wants to contain costs, and allow for pre-existing coverage, they could. They could mandate that the insurance companies contain costs. They, the government, said what we were allowed to make as agents. They can do the same thing for doctors and hospitals. They also could also put in some type of torte reform.. All of that is not in this bill or even being talked about.
Medicare is not a plan for catastrophic care. It has very low co-payments for doctor visits (20%) and hospital costs ($1068 deductible). It is not good for chronic illness (many visits to doctors) and cancer (20% co-pay for radiation and chemo). Why Medicare was designed with significant “gaps” is a good question. I think it was so that insurance companies could get a piece of the pie by selling supplements. Most people don’t think the cost of a supplement is too high if it results in 100% coverage. They say, “you pay for what you get”.
Part D should have been folded into Medicare, but insurance companies wanted the business. The real problem is that Part D has added billions to the Medicare budget and Medicare was prevented from negotiating prices for drugs.
I do think insurance agents are getting a bad rap. I know Medicare in and out and I help low-income people get signed up for help with their Part B premium and Part D costs. I see myself as a social worker with all the help I provide people.
As for deficits, in 2000 we had a balanced budget and the deficit was being paid down. Imagine what our country would be like if we had continued to balance the budget and pay down the deficit. We might not have a deficit today if that had happened. But somebody cut taxes and started two wars that cost one trillion dollars (so far). We could have afforded to give everybody health care. We could have done so many good things. Instead we are just about in a civil war within our country. Osama bin Laden must be very happy. It makes me very sad.
Wow, I guess we can blame everything that is wrong with America on the Republicans. I guess the President before him had nothing to do with what is going on nor the Democratic President who started Medicare. Not having the fore sight to see that Medicare would run out of money. Oh, I guess back then, being I was not alive when Medicare was started, they promised that this program would be perfect and that it would be completely funded and viable. That sounds a lot like what is being promised again.. When you do not know your history you are doomed to keep repeating the same mistakes. The same mistakes we cannot afford to make over and over.. The problems with Mediare has almost nothing to do with the President. However it has everything to do with corruption on both sides. So quit putting the blame on one side.
Medicare is running out of money because the US Congress, when run by Republicans OR Democrats, have taken money from the Medicare Trust Fund and spent it to cover their deficit spending. Both parties are guilty of this.
The idea of Medicare is a good one. The lowest reimbursement rates are Medicare rates. Doctors and hospitals now play one insurance company off another one as they negotiate what they want to be paid for services. This is the reason health care costs keep going up – there is no way to regulate or control them the way our system works.
The idea of doctors and hospitals acting as separate, for-profit businesses means costs will keep going up. Fee-for-service medicine means costs will keep going up.
The Mayo Clinic employs its doctors and so is able to control costs. This is the best model -whether an insurance company is paying the bills or the government is.
I think the best we can expect is legislation that will get everyone insured. Insurance companies are for this – they just want all the business, with no public plan competition. I think they’ll get what they want. But the second big issue is cost control, and this is not being addressed.
First, are you really an insurance agent? Just being on straight Medicare does not cover what Seniors need. Not to mention the costs associated with Original Medicare.
The last time I checked the doctors did not negotiate what they were going to make. They are told what they are going to make. Hum, the last cut to doctors was 10.7% “i could be off a little on this but it shouldn’t be that far off”.. Yea, that is the doctors telling Medicare what they are going to make.
So what you are saying is that we should all work for non-profit companies? That we should not work to make a profit! That makes no sense at all. What would be the reason for anyone to work harder, make better “things”… I suppose you walk everywhere, you grow your own food, and you built your house with your bare hands. It seems that all of those above items were build or made by a for profit company/business.
The largest problem is not a public option. It is the control costs. Which any good agent has been saying for a long time. Does there need to be a corrections in the insurance area, sure.. Does there need to be a public option, not at this point. Can more be done before trying a public option, YES.. There is SO much more that can be done that would lower costs without loss of benefits.
Obama cuts billions from MA at the same time he sends $8.5 billion to ACORN in the stimulus bill. Joe Wilson should get a medal fro bravery.
What is with this obsession with ACORN? How have they gotten billions from Obama? In fact, they have been told they will not get a contract for the upcoming census work. ACORN as the bad guy is a red herring. That means somebody is trying to distract you from the real issues.
Even if you like Joe Wilson’s stand on various positions, you should agree that the rules of protocol in the US Congress should be upheld – otherwise we become Iraq, with each side shooting at each other. I hope you don’t advocate that in the United States of America.
Regarding the socialst program known as Medicare: one reason it is going broke is because all the money that is supposed to go into the Medicare Trust Fund has been spent like general funds (for running the government). The Medicare Trust Fund is just one pile of I.O.U.s. This has gone on since Regan and perhaps before Regan.
There is plenty of waste that must be cut in Medicare. Medicare Advantage being paid 14% more per enrollee than Original Medicare is just one example of waste in the system.
Don’t you wonder why so-called fiscally-conservative Republicans opened the Medicare money spiggot when it came to Medicare Advantage and Part D? (see 2003 MMA)
How could they justify fiscally irresponsible levels of payments to insurance companies and introducing a new benefit like Part D – with no means of paying for them?
Now it has been left to Democrats (who actually like to spend government money) to pick up after the Republican frat party that put us one trillion dollars in the hole. (Remember this is what Obama started with.) So now the Democrats get to be the bad guys who have to tell the 10.5 seniors in Medicare Advantage that the party is over.
It will be interesting to see how that goes over. And we don’t have to wait too long, as ANOCs come out in October with the first wave of shocks for Medicare Advantage enrollees. I understand that zero premium plans (depending on the company) will have premiums. And co-pays will go up – all due to the first wave of cuts that start for 2010.
This should make for an interesting AEP and OEP.
I would bet that we all believe that there needs to be meaninful reform that reduces costs and pre-existing. That there is not an agent in this world that does not want to see all people covered. I believe we all can agree to that. Whether you believe a government plan would benefit people or not. Just simply adding it to the mix is not the anwser. Mainly they do not show how they are truely going to control costs. The only way they can control costs is to limit the pay to doctors, limit procedures, and limit the benefits. When the costs get out of control, then they will simply raise taxes to cover it. By then it will be too late and too costly to change.
President Obama does not know what he is doing. He lacks knowledge in the healthcare field. He is planning to computerize records that is not an urgent matter compared to the needs of actual patient care.
“You Lie” is sounding better and better, huh? I am just sorry that he(Joe Wilson) backed down!!
Hi, what worries me additionally is that due to “preexisting conditions” me and most of my clientel cann’t move to another company, unless this particular situation changes.
Be sure to have your clients write to the their respective Senators and Representatives. Tell them to vote out these Socialists next time around.