During the health care reform debate, conservatives defended the overpayments to private insurers participating in the Medicare Advantage program by arguing that any effort to reduce the subsidy or place the private insurers on an equal footing with traditional Medicare would endanger the Medicare coverage for the 11 million seniors enrolled in the program. MA benefits vary and often include coverage for services not available in traditional Medicare, like eye and dental care, but not all Medicare Advantage is created equal. In fact, over the years, a steady stream of government reports has found that while some plans may present a model of efficiency, others rip off both taxpayers and seniors.
A number of government reports and independent estimates have found that the extra federal dollars don’t improve health outcomes, pad insurers’ bottom lines, raise costs for beneficiaries in the traditional Medicare program, and expose beneficiaries to serious financial risks.
Now, a new report from the Government Accountability Office (GAO) concludes that some MA plans used lower premiums to attract healthier enrollees, but then hit them “with high and unexpected out-of-pocket costs“:
- The average plan in the good health group charged about $100 more in cost sharing for a typical inpatient hospital stay (6 days) and about $150 more for a typical inpatient mental health stay (21 days) than the average plan in the poor health group.
- The average plan in the good health group charged about $500 more in cost sharing for a typical SNF stay (35 days) than the average plan in the poor health group.
- The average plan in the good health group charged over $300 more in cost sharing for a year of renal dialysis (156 sessions)32 than the average plan in the poor health group.
The monthly Part C Medicare Advantage premium was $24 for the plans in the good-health group, $37 for the plans in the average-health group, and $31 for plans in the poor-health group, while out of pocket spending for kidney dialysis, for instance, ran from $1,802 for those enrolled poor-health plans and $2,118 for enrollees in the good-health plan.
The report notes that the administration “had already begun to overhaul the Medicare Advantage program even before health reform became law… by holding Medicare Advantage plans accountable for meeting minimum cost-sharing requirements” and Democrats are pointing out that the new law would limit “the ability of plans to charge higher cost-sharing for services most likely to be used by sick enrollees — such as nursing home care, dialysis and chemotherapy.”
Democrats are using the report to rally support for reform among seniors, who have generally remained weary of the new law, but it’s unclear that yet another report about insurer abuses will change many hearts and minds. That will depend on how Medicare Advantage carriers will react to the cuts in the law and whether regulators can actually keep insurers from gaming the system.