Talk in Washington of entitlement reform that would include reductions in Medicare spending is almost certain to give private health insurance companies a greater role in administering the nation’s health insurance program for the elderly.
Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some even providing vision and dental care and wellness programs.
It’s long a tradition for Republicans when they are in control of Congress to want to hand off more business to the private sector. That happened with the Balanced Budget Act of 1997 when private insurers saw big increases in enrollment thereafter. But Medicare Advantage also had bipartisan support under the Obama administration and the Affordable Care Act of 2010 when major Medicare spending reforms were implemented. That, too, triggered more enrollment in Medicare Advantage plans.
Seniors are already moving in large numbers to Medicare Advantage plans because out-of-pocket costs tend to be larger in traditional fee-for-service Medicare. Seniors in traditional Medicare “find their 20% coinsurance responsibility more burdensome as healthcare expenses continue to increase,” L.E.K consulting said in a November report.
“Medicare cuts almost certainly mean more cost-sharing and higher deductibles for beneficiaries,” John Gorman , executive chairman of the Gorman Health Group says. “Medicare Advantage offers more benefits for lower cost, and offers an annual limit on out of pocket costs that will be even more attractive after cuts.”
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Already, health insurance companies are making moves to prepare for increased enrollment in Medicare Advantage. Anthem last week closed on its acquisition of Florida’s HealthSun, which is a Medicare Advantage plan with 40,000 members. That deal came after Humana agreed to take a stake in Kindred Healthcare’s home division, which provides home health services to seniors and has significant overlap with the insurer’s Medicare Advantage membership.
And once CVS Health completes its acquisition of Aetna, the pharmacy chain and health insurer plan to roll out more programs to coordinate care for seniors in Medicare Advantage plans as a way to step up their marketing to potential customers.
Increasingly, seniors are choosing Medicare Advantage. Currently, just under 35% of Medicare beneficiaries, or about 20 million Americans, are enrolled in MA plans . But Medicare Advantage enrollment is projected to rise to 38 million, or 50% market penetration, by the end of 2025 , L.E.K. Consulting projects.
Insurers are banking on that figure. Four months before the L.E.K report, UnitedHealth Group executives predicted 50% Medicare Advantage penetration but didn’t say how soon that would happen.
“We do think there’s an opportunity to further advance the penetration of Medicare Advantage,” UnitedHealthcare CEO Steven Nelson said on the company’s second-quarter earnings call in July. “Where it can go, hard to tell, but I don’t think it’s unreasonable to think about something north of…40% approaching 50%. It doesn’t seem like an unreasonable idea to us.”
MEDICARE ADVANTAGE is the third attempt of the Feds to reduce costs for Medicare. Their first attempt several decades ago was called Medicare HMO… it failed after about 10 yrs +/-… “extra” services started to be dropped, copays, deductibles, and premiums started to increase… healthcare providers started dropping out of the program.. and Medicare HMO was abandoned
A decade or so later … the Feds brought out Medicare-C… with the same promises of extra services, lower copays and premiums and over a decade or so.. it followed the same path as Medicare HMO.
The latest reincarnation is Medicare Advantage… regular Medicare only uses insurance companies to process the claims for services provided Medicare beneficiaries.. the insurance companies only charge a administrative fee and are not a financial risk.
IMO, if you look at the current enrollment of Medicare Advantage I believe that you will find a very large percent of those that are on Medicare disability and those seniors who are “not too well off”.. Generally few – if any – Medicare supplements will write a policy for those on disability and some seniors cannot afford the cost of a Medicare supplement and Part D premiums.. upwards of $200 +/month for each patient..
So our bureaucrats are going to talking about turning over more – or all – of the Medicare population to FOR PROFIT insurance companies… that are going to promise more products/services for less out of pocket money for those on Medicare.
Isn’t it about time that someone DO THE MATH… you turn over healthcare to a number of FOR PROFIT health insurance companies and they are going to promise more product/services for less out of pocket costs for the Medicare beneficiaries they cover and the Feds gets to pay a flat $/person/month.
WHAT COULD GO WRONG ?
Filed under: General Problems
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