Helping Seniors Understand Why Health Care Reform Bills Strengthen the Medicare System
During the November RESULTS conference call, partner Ginnie Vogts of Columbus, Ohio, asked how to address seniors’ concerns that health care reform is going to diminish their Medicare benefits. This concern extends to 20% of current Medicare beneficiaries — or about 10 million out of 44 million people — who are enrolled in Medicare Advantage Plans. To know the percentage in your state, you can see the enrollment state chart on the Kaiser Family Foundation Medicare Advantage page.
To understand their concerns we need to know the lure of Medicare Advantage Plans; to alleviate the concerns we need to know how the pending legislation strengthens Medicare by bringing fiscal responsibility to short-term advantages they may value, for true long-term advantages of a sustainable Medicare system for all.
Medicare Advantage Plans started as an alternative to traditional Medicare based on insurance companies’ claims they could be more efficient with lower costs. Instead, these plans cost more than traditional Medicare, with a substantial portion of the excess costs benefiting insurers and not beneficiaries. Here’s how it works: in these plans you get all of your Medicare-covered health care PLUS extra benefits and lower co-payments than in regular Medicare because those enrolling agree to see doctors that belong to the plan or go to certain hospitals to get services. An example is a Medicare beneficiary who agrees to use a Health Maintenance Organization or Preferred Provider Plan, who possibly pays an extra premium to do so, and who thus upgrades to additional benefits that may, for example, include preventive care like gym memberships. In some cases, even private fee-for-service plans are available.
To sell and administer these Advantage Plans, insurers incur additional costs in the form of marketing and advertising, administration, and let’s not forget profits. As a result, in 2009 Medicare will pay Medicare Advantage plans 14 percent more per beneficiary than it would cost to cover these beneficiaries in traditional Medicare, driving up costs of the whole Medicare system for the substantial majority of non-participating beneficiaries and for the government-paid system as a whole. Continuing down this path with Advantage plans that benefit insurers will help bankrupt Medicare. Read more about Medicare Advantage Plans on our website, why President Obama has called for elimination of these subsidies to insurers under the Advantage plans in his statement on “Health Insurance Reform and Medicare,” and why the House-passed bill and Senate proposed legislation all tackle payment rates under Advantage plans. None of these bills eliminate Advantage plans.
Will these rate cutbacks do anything to diminish the health of those currently in the Advantage plans? First, there is no evidence that Advantage plans lead to better quality health care for Medicare beneficiaries. The extra payments enrolled seniors make may not result in extra benefits or improved care, and yet they may end up spending more out-of-pocket under an Advantage plan, not less. Most low-income, minority seniors obtain additional coverage they need through Medicaid, not Medicare Advantage. Despite a recent report from the Center for Medicaid & Medicare Services outlining the over $500 billion in proposed cuts to Medicare affecting primarily hospital and institutional care payments, the American Association for Retired Persons (AARP) has reiterated its endorsement of the health care reform legislation. Read Dau’s response in Politico to House Minority Leader John Boehner’s letter asserting that the House bill jeopardizes seniors’ access to quality, affordable health care.
In crafting letters to the editor and working with the media, especially in areas where Advantage plan enrollments are high, be sure to address the concerns of fearful seniors that they will lose their Medicare benefits if reform legislation is passed. Stress that no one will lose their Medicare benefits as a result of the legislation and indeed that many low-income seniors will benefit from the changes passed by the House, and proposed by the Senate. Medicare Advantage Plans will continue to be available. What some beneficiaries may fear they are “losing” is the ability to piggy back on Medicare benefits, pay more to insurance companies for what may be illusory improved care, and in doing so, help insurance companies undermine the financial sustainability of the whole system they are using. It is to no one’s advantage if the whole system fails, or if the clearly beneficial changes to Medicare do not pass.