Wednesday, April 08, 2009

David Walker and Medicare Advantage

"We want Medicare Advantage to save us money."  David Walker, Comptroller General of the US, on CNBC this morning.

Whoever said that Medicare Advantage was supposed to save us money?  Walker is the guy who goes on 60 Minutes every 6 months or so to tell us all that Medicare and Social Security are going to bankrupt the nation and lead to Armageddon.  We're putting the bill on our kids' credtit card, yada, yada, yada.  

He was doing his shtick with his emotion very well articulated, as usual, this morning.  Today he mentioned how the Medicare Advantage programs are costing the system instead of saving money as they were supposed to do.

Wait a minute.  Who said the Medicare Advantage (MA) program was supposed to save the Medicare system money?  We've known for quite a while that MA plans cost the beneficiary a monthly fee that really adds no value on a population basis, and the costs to the Medicare pool are also increased.  It's a twofer for the insurance industry.

I'm not busting Walker's chops on this, but let's call it like it is.  MA is a boondoggle that was designed by the insurance industry in order to get their grubby hands on public funds, something they have been wanting to do ever since publicly funded health took hold.  In fact, insurance executives brag to shareholders that their MA plans add dollars to the company's balance sheet, and these are dollars that are unavailable to patient care.

Medicare is designed to be comprehensive.  The amount paid in premiums to an insurance company for MA plan is split with much of the total going to further administrative expense.  

Insurance companies tout their ability to screen doctors and monitor quality, which is really cose for limiting choice to the lowest cost providers.  The quality standards within the Medicare system are the highest in the industry and private insurers do not add any value to the product offered.  

Medicare is in financial trouble.  Costs are spiraling upward with increasing enrollment and health care costs.  Having private insurers ladle off some fat was okay when we were solvent, but this is one boondoggle that needs to be removed.  If folks can pay hundreds per month for a private plan, then perhaps they should be paying more for the basic Medicare.

The fact is, the vast majority of MA customers would be better off just banking the premiums and paying out of pocket for additional care and copays.

No comments: