Minneapolis Newspaper October 15th Sunday issue star tribune It arrived at my door wrapped in a four-page ad for something called Allina Health-Aetna. Allina is a complex clinic chain with 12 hospitals. Aetna is a health insurance company that was acquired by pharmaceutical chain CVS for $69 billion five years ago.
The purpose of the ad is to encourage the 20% of Minnesotans eligible for Medicare (the national health insurance program for seniors and people with disabilities) to enroll in Allina Aetna’s “Medicare Advantage” plan. Met.
“Medicare Advantage” is a misleading name given to the privatized portion of Medicare. In this part, tax money is funneled through the insurance company, which can take 15% from the top for administrative costs and profits before remitting the remaining 85% to the insurance company. Doctors and hospitals are tied together. The traditional Medicare program (the part that hasn’t been privatized) doesn’t funnel money through insurance companies. The company pays doctors and hospitals directly, with about 2% of its spending going toward administrative costs. Currently, half of Medicare beneficiaries are insured by an insurance company, and the other half are insured by traditional Medicare.
Alina Aetna’s ads touted that its “advantageous” plans covered additional services that Congress would never allow covered under the traditional Medicare program. The top half of the ad’s first page was taken up by the words, “Can I get dental, vision, and hearing benefits with my Medicare plan?” Just below the crease were the words “Yes, yes, yes!”
What the ad did not explain was how health insurance companies not only survive within Medicare, but also make significant profits. After all, Congress enacted Medicare in 1965 because the health insurance industry didn’t want to insure the elderly and disabled. Why are insurance companies today offering extra services and making exorbitant profits despite high administrative costs? One study found that U.S. health insurance companies are increasing the number of Medicare enrollees1 The profit per person is 2.5 times that of private sector customers. 2021 KFF Papers About the financial performance of health insurance companies.
The answer is that they are grossly overpaid.according to report A report released earlier this month by doctors at the National Health Program, which I helped write, put the overpayments in 2022 at between 22% and 35%. In other words, the cost of insuring Medicare beneficiaries through Medicare Advantage is between 22% and 35% higher, or between $88 billion and $140 billion, than if these beneficiaries remained in traditional Medicare. It was. That’s an astronomical number. For example, $75 billion spent by the US Regarding humanitarian and military assistance to Ukraine from February 2022 to October 2023.
The PNHP report lists five causes for these overpayments.
- “Favorable selection” means that insurance companies keep beneficiaries who are healthier than average away from traditional Medicare, but Medicare still pays beneficiaries with average health as if they had enrolled them. (11% to 14% overpayment).
- “Upcoding” is the name given to the practice by which insurance companies create enrollees. looks bad Adding a false or unrelated diagnosis to the patient’s medical record (thus ensuring higher reimbursement) to the patient’s medical record (5%).
- Pointless Bonuses Congress requires Medicare to reward Medicare Advantage plans for high scores on scorecards that are so inaccurate that the Medicare Payment Advisory Commission asked for its end (Four%);
- Congress ordered Medicare to give plans (2% to 3%) that sell insurance in more rural areas of the country that plans tend to avoid.
- and supplemental (Medigap) coverage, which is a subsidy created by Medicare using the average cost of insurance for traditional Medicare beneficiaries as a baseline for determining how much a plan will pay. The portion of traditional Medicare costs paid by is unchanged (9%).
Estimates of PNHP’s total overpayments do not take into account “favorable deselection,” or returning sicker Medicare Advantage enrollees to traditional Medicare by denying them needed services.we have abundant evidence This means that Medicare Advantage plans deny essential services to tens of thousands of enrollees each year. However, there is no research on how much that adds up to the overpayment. This abuse of enrollees, he says, is just one reason why studies show that Medicare Advantage plans have a positive but compounding impact on quality.
The four-page ad for Alina Aetna currently in my recycling bin makes no mention of overpayments and why Medicare beneficiaries should consider avoiding enrolling in a Medicare Advantage plan (narrow network and (Frequent denial of service is the most important) is also not mentioned. ).
Congress should immediately end overpayments and at the same time authorize traditional Medicare to cover dental, vision, and hearing services.
