CVS stock plunges after Blue Shield of California drops retailer’s pharmacy services to save on drug costs

CVS stock plunges after Blue Shield of California drops retailer’s pharmacy services to save on drug costs

https://www.msn.com/en-us/money/companies/cvs-stock-plunges-after-blue-shield-of-california-drops-retailer-s-pharmacy-services-to-save-on-drug-costs/ar-AA1fp04L

Shares of CVS Health plunged 9% on Thursday after Blue Shield of California said it will drop the company’s pharmacy benefit management services and instead partner with Mark Cuban’s Cost Plus Drugs company and Amazon Pharmacy to save on drug costs for its nearly 5 million members. 

The announcement hints at the potential for health insurers to abandon the traditional pharmacy benefit manager, or PBM, system and sent shares of other companies that offer PBM services lower.

Cigna and UnitedHealth Group dropped about 7% and 1%, respectively. 

PBMs maintain lists of drugs covered by health insurance plans and negotiate drug discounts with manufacturers. But they have recently come under scrutiny from lawmakers for their role in inflating drug prices and causing health-care costs to skyrocket. 

CVS Health’s Caremark has been Blue Shield’s PBM partner for more than 15 years. 

Blue Shield will now work with five different companies to provide “convenient, transparent access to medications while lowering costs.”

Blue Shield CEO Paul Markovich said the plan, which is scheduled to fully launch in 2025, could save the company up to $500 million annually. 

Amazon Pharmacy will offer at-home drug delivery. Cuban’s Cost Plus Drug Company will provide access to low-cost medications through retail pharmacies. Another company, Abarca Health, will process drug claims.

Blue Shield will retain CVS Caremark for its specialty pharmacy services, which provide specialized therapies and counseling to patients suffering from complex disorders. 

“We look forward to providing care for Blue Shield of California’s members who require complex, specialty medications — as we have for nearly two decades,” said Michael DeAngelis, a spokesman for CVS Health, in a statement to CNBC.

Still, the loss of Blue Shield’s PBM partnership is another blow to Caremark, which is also set to lose a contract with Centene next year.

Just Imagine: being on Medicaid and a chronic pain pt and expecting to receive appropriate healthcare

The Doctor Won’t See You Now

Provider access is a major challenge for Medicaid patients

https://www.medpagetoday.com/opinion/second-opinions/105876

Patients are increasingly alarmed by the health workforce shortages delaying care, reducing access, and in some cases harming patient safety and quality of care.

Policymakers usually rely on provider counts to estimate and address shortage areas. However, we know that not all providers accept all types of insurance.

More specifically, the greatest shortfall of available providers is experienced by some of the poorest and sickest among us. Nearly 94 million people are covered by Medicaid, and secret shopper studies and physician reported surveys show that doctors are less likely to accept patients with Medicaid compared to those with private insurance or even Medicare.

We know that simply having health insurance is not enough; we also need more healthcare providers willing to see Medicaid patients.

Newly available Medicaid claims data (T-MSIS) now allow us to systematically track providers that serve Medicaid patients, as well as those that don’t. The data on primary care providers is displayed on our Medicaid Primary Care Workforce Tracker, where consumers can view trends over time, by specialty type, at a national, state, and county level.

As we report in the forefront section of the journal Health Affairs, the Tracker reveals a mix of good and bad news for Medicaid patients across the nation. In 2019, the percent of primary care physicians who provided any appreciable care to Medicaid patients — seeing just 11 or more patients over the year — ranged from 84% in Wisconsin to as low as 61% in New Jersey, suggesting the variability in state Medicaid policies matters a great deal.

Overall, the number of any type of primary care provider who saw Medicaid patients rose 13% from 2016 to 2019. However, advanced practice nurses and physician assistants made up 95% of the increase. The increase in physicians was only 1%, and the number of ob/gyns seeing Medicaid patients actually dropped 2.5% over the 3-year period, with 24 states losing ob/gyns accepting Medicaid over this period.

In 2019, 44% of U.S. counties had no Medicaid ob/gyns at all. Given that access to pre- and post-natal care can prevent life-threatening complications, this statistic translates to women dying in childbirth and other shameful health outcomes.

Thirteen states also saw a loss of Medicaid family medicine physicians, 21 states saw a loss of Medicaid internal medicine physicians, and 11 states saw a loss of Medicaid pediatricians.

There are many reasons healthcare providers and practices refuse or limit Medicaid patients. Across the U.S., state Medicaid programs pay on average 72% the rate of Medicare, and on top of the low pay, many providers cite other barriers to participation including loads of paperwork.

The federal government does require states to establish access standards for Medicaid managed care programs. However, enforcement by state agencies is variable and historically, there has been little oversight

In 2020, CMS issued a rule requiring states to develop quantitative network adequacy standards. Earlier this year, the Biden-Harris administration proposed new rules to establish national standards for appointment wait times and to require states to conduct secret shopper surveys to verify state compliance. These are important steps forward, but will require vigilance to ensure enforcement.

Overall health workforce shortages also limit the number of providers Medicaid may draw from. These shortages are only getting worse due to burnout and moral injury. In communities with too few resources, there are too few healthcare providers. It’s always those with the least who suffer the most.

During the COVID-19 pandemic, health workforce programs saw increasing investments. Programs like the National Health Service Corps — which places primary care and mental health providers in underserved settings in exchange for loan repayment — and the Teaching Health Centers program — which supports community-based physician and dental residency training programs — received American Rescue Plan Act funding. The federal government and states passed emergency policies to support telehealth and to allow advanced practice nurses and physician assistants to practice at their full scope. However, with the end of the COVID-19 public health emergency and the recent debt ceiling deal claw-back of unspent COVID relief funds, these programs are at risk again.

Among the lessons of COVID-19 is the importance of caring for America’s essential workers who keep our society functioning. These workers are often poorly paid and therefore rely on programs like Medicaid. It was also this population that (on top of pre-existing disparities) faced the brunt of COVID illness and death.

To ensure access to healthcare for women, children, essential workers and others, we need more providers willing to see Medicaid patients. Policymakers can help make that happen with better pay and a reduction in the administrative burdens associated with the program.

Such action would be a small price to pay for a healthier population — and a much stronger workforce.

Patricia Pittman, PhD, is the director of the Fitzhugh Mullan Institute for Health Workforce Equity, which is based at the George Washington University Milken Institute School of Public Health, and a professor of health policy and management. Candice Chen, MD, MPH, is a member of the Mullan Institute, and an associate professor of health policy and management at the George Washington University and a board-certified pediatrician.

exploring the National Pain Strategy and the CDC Guidelines

Here we start our journey into exploring the National Pain Strategy and the CDC Guidelines. Since the release of Violation of A Nation in April 2019, we continued our search for information and found more information that supported our report. Come join us as we unveil the story of how we found out that the CDC Guidelines were a part of the National Pain Strategy. Also, we discuss the opposition and other “advocates” in the community that have tried to disrupt our work. This is part one of a three part series. Thank you for joining us! You can find documentation of this work on our twitter account and on our website at www.ciaag.net Below is the link to the document that we wrote about the NIH meeting. http://9thx.mjt.lu/nl2/9thx/5qy19.htm…

taking the DEA to task over raiding doctor David Bockoff’s office

This video is in regards to a lawsuit filed by some of doctor David Bockoff’s pts after his office was raided and shutdown by the DEA late in 2022. https://www.pharmaciststeve.com/summary-dea-raid-dr-bockoffs-office-3-dead-1-15-million-cash-confiscated-from-doc-will-be-hear-about-future-deaths/  there is a lot of information in this video and one important information point is concerning all of these chronic pain pts technically being abandoned by actions of the DEA.

What came to my mind is that those agreements with those 3 major drug wholesalers and 3 major chain pharmacies (CVS, Walmart, Walgreen) that those corporation signed and agreement that they would sell fewer controls to all pharmacies and those three pharmacies would dispense fewer controls.

https://www.pharmaciststeve.com/dea-surrogates-are-trying-to-throttle-the-availability-of-controlled-meds-to-pts/

Here is the SMOKING GUN to prove civil rights violations – could support a class action lawsuit – but the community needs to stand up

Is this an intentional abandoning a certain number of pt who have a medical necessity for controlled meds?Atch 1 – Opening Brief – Petition for Review – Snyder v. Garland – 23-1007 – 8-7-2023 Official Filing (3)Atch 1 – Opening Brief – Petition for Review – Snyder v. Garland – 23-1007 – 8-7-2023 Official Filing (3)

Atch 3 – 2023 CA pain-guidelines

BRANDY R. MCMILLION’S ABSURDITY OF LAW, ABUSE OF POWER, MISUSED OF AUTHORITY: ARTICLE FILED IN OPPOSITION TO HER NOMINATION AS A FEDERAL JUDGE

Among the higher-profile cases that McMillion worked on was the prosecution of Dr. Rajendra Bothra of Bloomfield Hills, who faced charges in an alleged $500 million health care fraud scheme. Bothra was acquitted last year after spending three years in jail prior to his trial. Bothra was found not guilty of more than 40 federal counts along with his former employees, Ganiu Edu, David Lewis, Christopher Russo in what was considered one of the biggest losses for the U.S. Attorney’s Office in more than 10 years. The one-year anniversary of the acquittal is Thursday.President Joe Biden plans to nominate another Michigan prosecutor to the U.S. District Court for the Eastern District of Michigan, Brandy R. McMillion,

THE AMERICA AGONY: OPPOSING AUSA BRANDY R. MCMILLION’S NOMINATION TO FEDERAL JUDGESHIP: UNFIT TO SERVE: Part-1

 

Heart Failure Observed in T2DM Patients Who Used NSAIDs

Heart Failure Observed in T2DM Patients Who Used NSAIDs

https://www.uspharmacist.com/article/heart-failure-observed-in-t2dm-patients-who-used-nsaids

Previous research has demonstrated that fluid retention and endothelial dysfunction have been correlated with the use of NSAIDs, and T2DM ( type 2 diabetes ) has been associated with both a deterioration in kidney function and sub-clinical cardiomyopathy. In a recent study, researchers indicated that the short-term use of NSAIDs among patients with T2DM is correlated with a higher risk for heart failure (HF) hospitalization.

In the study published in the Journal of the American College of Cardiology, researchers “hypothesized that short-term use of NSAIDs could lead to subsequent development of incident heart failure (HF) in patients with T2DM.”

The analysis included data from Danish nationwide health registers for patients aged 18 to 100 years who were diagnosed with T2DM or initiated anti-diabetic treatment from 1998 to 2021. Study participants had no previous HF or rheumatic disease or filled NSAID prescriptions 120 days before diagnosis. Type 1 diabetes patients and women aged younger than 40 years who were only taking metformin (who might represent polycystic ovary syndrome rather than T2D) were excluded.

Follow-up commenced 120 days after T2DM diagnosis, and the patients were followed until first-time HF hospitalization, death, or December 31, 2021, whichever occurred first.

The primary exposure was a claimed prescription for an NSAID, and the researchers reported percentages of patients who claimed up to four prescriptions within 1 year from the start of follow-up. In the case-crossover analyses, the participants were considered exposed if an NSAID prescription was claimed within 28 days before the initial HF hospitalization.

The results revealed that of the 333,189 patients with T2DM, 44.2% were female, the average age was 62 years (interquartile range: 52-71 years) with 23,308 patients being hospitalized with HF during follow-up, and 16% of patients indicated the use of at least one NSAID prescription within 1 year.

Additionally, short-term use of NSAIDs was correlated with augmented risk of HF hospitalization (odds ratio [OR] 1.43; 95% CI, 1.27-1.63), most notably in subgroups aged ≥80 years (OR 1.78; 95% CI, 1.39-2.28), elevated hemoglobin A1c (HbA1c) levels treated with zero to one anti-diabetic drug (OR 1.68; 95% CI, 1.00-2.88), and without previous use of NSAIDs (OR 2.71; 95% CI, 1.78-4.23).

All-cause mortality after the initial HF hospitalization was reduced in patients exposed to NSAIDs compared with those who were not exposed to use of NSAIDs before HF hospitalization, with a 1-year standardized absolute risk difference (ARD) of –2.9% (95% CI, –5.3% to –0.4%), a 3-year ARD of –3.7% (95% CI, –6.9% to –0.5%), and a 5-year ARD of –3.9% (95% CI, –7.3% to –0.5%).

The authors concluded, “An elevated risk of HF was found when relating short-term NSAID use and first-time HF hospitalization using a self-controlled design with advanced age, elevated HbA1c levels, and no previous use of NSAIDs most strongly associated with first-time HF.”

Finally, the authors wrote. “Interestingly, the prognosis following incident HF for both NSAID-exposed and nonexposed was comparable. Individual risk assessment is advised if prescribing NSAIDs for patients with T2DM.”

The content contained in this article is for informational purposes only. The content is not intended to be a substitute for professional advice. Reliance on any information provided in this article is solely at your own risk.

Major Drug Wholesalers meeting the terms of agreement with 50 states’ Attorney Generals ?

Looks like those 3 major drug wholesaler’s agreement with those 50 states’ Attorney Generals are starting to get traction. The two quotes below, I don’t know if they are from a chain or a independent, but apparently the first – the reduction of your basic Norco 10/325 is only shipping 1/3 of the pharmacy normally uses per day.  Keep in mind that drug wholesalers only deliver FIVE DAYS A WEEK… So if this particular pharmacy is using 15 bottles a day – 7 days a week and they are only getting 5 bottles a day – 5 days a week. They are only getting abt 25% of what they normally use. That would suggest that some 255 pts are not going to be their month’s worth of  pain meds at just this ONE PHARMACY and will be some 30,000 doses short on this one med for ONE MONTH.
May be a Twitter screenshot of text that says 'r/pharmacy u/Jizzillionaire2 23h Norco Norco shortage Discussion Our wholesaler is limiting us to 5 of the 100-count 10/325 bottles per day in California. We normally go through about 15 bottles a day. Anyone else have this happening? This is really making things difficult. 65 54 Share ek_2024 23h Yes. We have had a lot of issues getting in norco. Specifically 7.5 and 10. We've also had some issues getting Percocet. It's scary. Not to mention how angry patients are getting at us'

diagram

Which pharmacies topped J.D. Power’s 2023 survey?

These rating can be somewhat deceptive.  Good Neighbor Pharmacy is a Franchise owned by the major wholesaler Amerisource Bergen and Healthmart is another Franchise owned by another large drug wholesaler Mc Kesson and a third Medicine Shoppe is another franchise owned by the large drug wholesaler Cardinal.  While technically they are rated as chains but in most instances the pts are dealing with the Pharmacist/owner. Staffing levels are what the Pharmacist/owner considers appropriate and not be determined by someone at a corporate HQ level and what will meet the bottom line by some executive to help assure that he/she gets their bonus. Look at this hyperlink https://www.jdpower.com/sites/default/files/file/2023-07/2023079%20U.S.%20Pharmacy%20Study.pdf

It has some graphics that would not copy/paste very well.  You will see that in most all of the various segments of how pharmacies are classified, Walgreens & CVS are at the END OF THE LIST.

This survey just validates why I traditionally recommend that pts seek out a independent pharmacy to get better service. Here is a hyperlink to find a independent by zip code and radius https://ncpa.org/pharmacy-locator

Which pharmacies topped J.D. Power’s 2023 survey?

https://drugstorenews.com/which-pharmacies-topped-jd-powers-2023-survey

Good Neighbor Pharmacy and Sam’s Club are among the pharmacies that have earned J.D. Power’s recognition.

J.D. Power has released its pharmacy customer satisfaction rankings.

Good Neighbor Pharmacy, a national independent pharmacy network and pharmacy distributor offered through AmerisourceBergen, and big box retailer Sam’s Club, both have a reason to celebrate.

Good Neighbor Pharmacy has been ranked “First in Customer Satisfaction with Chain Drug Store Pharmacies” in the J.D. Power 2023 U.S. Pharmacy Study. This is the 12th time that Good Neighbor Pharmacy has earned this recognition in the last 14 years and the network’s seventh consecutive win.

“I’d like to extend my sincere congratulations to our Good Neighbor Pharmacy members on receiving this prestigious recognition from J.D. Power for the seventh consecutive year, a feat that is truly reflective of independent pharmacies’ dedication to playing a pivotal role in the health and well-being of the communities they serve,” said Jenni Zilka, president of Good Neighbor Pharmacy. “With this achievement, our network is invigorated and even more enthusiastic about continuing to champion the vital role of independent community pharmacies in fostering healthier futures for all.”

[Read more: Good Neighbor Pharmacy administers more than 5M COVID-19 vaccines]

The J.D. Power 2023 U.S. Pharmacy Study was conducted using a methodology consisting of the evaluation of seven factors that represent distinct parts of the customer experience. These seven factors were embedded into an index comprised of a calculated roll up of performance scores, weighted relative to the importance of each factor to overall satisfaction. In addition to receiving the highest overall satisfaction ranking, Good Neighbor Pharmacy ranked #1 across six of the seven study factors, specifically:

  • Pharmacy offerings meet my needs—medication and health and wellness services;
  • Able to get prescriptions how/when I want;
  • Resolving problems or complaints;
  • People;
  • Helping to save me time or money; and
  • My level of trust with pharmacy.

“I am honored to see Good Neighbor Pharmacy emerge once again as Best Chain Drug Store Pharmacy for Customer Satisfaction in the J.D. Power 2023 U.S. pharmacy study,” said Brian Nightengale, president of community and specialty pharmacy, long-term care at AmerisourceBergen. “To our member pharmacies, congratulations! While your outstanding work of course reflects positively on the Good Neighbor Pharmacy name, it much more importantly makes a significant difference in the lives of countless patients across the nation. Thank you for going above and beyond to ensure the health of our communities, and giving others the opportunity to witness and believe in the transformative power of independent pharmacies.”

Sam’s Club also has a reason to celebrate. The big box retailer was ranked highest in Customer Satisfaction with Mass Merchandiser Pharmacies for the eighth consecutive year, according to the study.

Sam’s Club has received the recognition from J.D. Power 10 of the last 12 years.

“This recognition is a reflection of the incredible pharmacists and pharmacy team associates we have across the country who serve our patients with knowledge and care every day,” said Sean Jackson, senior vice president and GMM of Health and Wellness and Consumables at Sam’s Club. “We work every day to give our patients access to high-quality and affordable healthcare services, and we are thrilled they responded to this study in such a positive way.”

According to the study, respondents rated Sam’s Club No. 1 in pharmacy offerings that meet their needs, which includes medication and health and wellness services. Respondents also ranked Sam’s Club Pharmacy No. 1 in level of trust and saving them time and money. Sam’s Club operates Optical Centers and Hearing Aid Centers in the majority of its nearly 600 locations. In addition to its robust RxSavings program where all patients have access to discounted prescriptions, the retailer offers additional discounts on prescriptions to its Plus Members.

“We welcome new patients to visit our clubs and meet their local pharmacists to learn how we can help support their health and wellness needs,” Jackson said.

[Read more: Good Neighbor Pharmacy adds COVID-19 vaccine locator tool]

Here are some additional rankings:

Following Good Neighbor Pharmacy, which ranked highest among brick-and-mortar chain drug store pharmacies for a seventh consecutive year, with a score of 793, is Health Mart (770), which ranks second, and Rite Aid Pharmacy, which ranks third (680).

Following Sam’s Club, which ranks highest among brick-and-mortar mass merchandiser pharmacies for an eighth consecutive year, with a score of 788, is Costco (755), which ranks second.

H-E-B ranks highest among brick-and-mortar supermarket pharmacies for a third consecutive year, with a score of 760. Wegmans (753) ranks second and Publix (744) ranks third.

Kaiser Permanente Pharmacy ranks highest in the mail order segment, with a score of 748. PillPack (an Amazon Company) (709) ranks second and Express Scripts Pharmacy (699) ranks third.

The J.D. Power 2023 U.S. Pharmacy Study, now in its 14th year, measures customer satisfaction with mail order and brick and mortar pharmacies. The 2023 study is based on responses from 12,396 pharmacy customers who filled a prescription in the last 12 months prior to the survey period of August 2022 to May 2023.

To read the full report, click here.

 

https://www.jdpower.com/sites/default/files/file/2023-07/2023079%20U.S.%20Pharmacy%20Study.pdf

 

 

Do not go gentle into that good night

I try to look at things from a distance so that I can have a perception of the larger picture. There seems to be at least three large segments within the chronic pain community.

  • there are those that have lost most/all their medication
  • there are those that will probably lose their medication in the near term
    • there are those who are in denial they are going to loose their meds or oblivious of what is coming over the horizon that will effect their QOL.

How many pts are going to go “gently into the night” ?  Commit suicide and the family has a very quiet funeral and/or cremates the body and everyone consoles each other that their family/friend is no longer in pain, no longer suffering. It is as if the person just “disappeared”  from the face of the earth.

Or, all those years of under/untreated pain and their adverse impact on the pt’s comorbidity issues, finally took their toll. A death that is probably labeled as “natural causes”. Most of their friends knows that there was nothing related to NATURAL CAUSES about their death.

Those chronic pain pts who are not able to be their own strong advocate, they need someone within the family circle to advocate for them. For whatever reason that someone is a “passive pt” they will typically end up with poor medical outcomes and often compromised QOL Someone that has the cojones and Chutzpah and has a medical power of attorney to act on behalf of the person.

Most communications with the practitioner should be done via pt portals/EMR (electronic medical records).  One to one verbal conversations can later be “not remember” or “not exactly what was stated”.  Communicating via EMR and printing out what was submitted to the practitioner and what they response – or lack of response – is… can be used in whatever is needed to document what was said or promised.

A good example, a pt’s pain meds have been reduced, pt who has had “normal-tensive blood pressure “, but the pt’s BP dramatically goes up, simple ask the practitioner what is going to be done about the pt’s hypertension?  After the pt is put on 4-5 different categories of pharma’s anti-hypertensives and the pt’s hypertension doesn’t change.  Ask the question, could there be a connection between little/no pain management and hypertension?  If they say NO.. ask if the pt could be put back on their previous pain meds to see if there was a connection? If they say NO… forget that old “do no harm quote”…  they are suppose to be “healers”. Every NO you get from the practitioner, is just a deeper hole they are digging themselves into.  Send them a article about that hypertension is the “silent killer”..  Is the pt having a stroke, heart attack, kidney damage or eye damage the practitioner’s “health outcome”

By the time the practitioner has figured out the hole they have dug themselves into, it will be too late. If you have printed out and saved all the communication documentation. If the practitioner tries to delete chose pieces of communications… the hole just got deeper.

Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light.

Though wise men at their end know dark is right,
Because their words had forked no lightning they
Do not go gentle into that good night.

Good men, the last wave by, crying how bright
Their frail deeds might have danced in a green bay,
Rage, rage against the dying of the light.

Wild men who caught and sang the sun in flight,
And learn, too late, they grieved it on its way,
Do not go gentle into that good night.

Grave men, near death, who see with blinding sight
Blind eyes could blaze like meteors and be gay,
Rage, rage against the dying of the light.

And you, my father, there on the sad height,
Curse, bless, me now with your fierce tears, I pray.
Do not go gentle into that good night.
Rage, rage against the dying of the light.

Medicare is quietly being privatized. Does anyone care?

This Medicare Advantage prgm is the THIRD time that the Feds have tried such a private version of Medicare. First was Medicare-HMO,  which lasted a number of years but eventually pts dropped out of the system because of poor care and deductibles, copays and other costs increased for the pts and the prgm folded.  Congress tried a second time with Medicare-C and it followed a similar path as Medicare HMO and it folded. Now we have Medicare Advantage, which they are trying to rename to Medicare-C.

This reminds me of the PBM industry that started out first as a way to standardize billing to the insurance industry, and goals to save everyone money, but once it evolved controlling > 50% of the prescriptions, their agenda seemed to refocus on their bottom line. Here is a recent article were the PBM’s controlling Ohio’s Medicaid prgm.. were found to OVER CHARGING the state abt 200 million/yr  https://www.pharmaciststeve.com/imagine-adding-a-middleman-to-ohio-medicaid-and-the-state-got-overcharged-abt-200-million-yr/

I have heard of pts being  “sold” on a particular Medicare-C prgm, which had more to do with the commissions the insurance agent will earn on the particular Medicare-C program they are “pushing”.  Now that this prgm has passed the 50% mark of all  Medicare folks enrolled into such programs. Can we expect to see smaller networks of providers in a particular Medicare-C prgm, higher deductibles and copays and pull back on  “extras”. Could we see the day where traditional Medicare is no longer going to be an option for those reaching 65 y/o ? The youngest baby boomer will soon be 60 y/o. As more and more FOR PROFIT CORPORATIONS are overseeing our healthcare. Your QOL may become more of a commodity.

Medicare is quietly being privatized. Does anyone care?

https://www.marketwatch.com/story/medicare-is-quietly-being-privatized-does-anyone-care-6afb22b4

More than half of all Medicare beneficiaries are enrolled through private insurers

The campaign to privatize Medicare has just passed a landmark. This year, for the first time ever, more than half of all Medicare beneficiaries are enrolled through private insurers, a system known as Medicare Advantage.

“In 2023, 30.8 million people are enrolled in a Medicare Advantage plan, accounting for more than half, or 51 percent, of the eligible Medicare population, and $454 billion (or 54%) of total federal Medicare spending (net of premiums),” reports the healthcare nonprofit and thinktank the Kaiser Family Foundation.

As recently as 2005, privatized Medicare plans accounted for just 13% of beneficiaries. By 2033 they are expected to be above 60%.

This is a remarkable evolution. Medicare was created as a government program. But today more than half its beneficiaries are in the hands of private insurers, rather than the government.

Private Medicare plans have existed since the 1970s but only really took off in recent decades. A big change came under President Obama. His Affordable Care Act, aka “Obamacare,” improved the system, drove down costs and introduced incentives for insurers to make their plans better — including a star rating and annual bonuses for hitting quality targets.

Kaiser reports that those bonuses are on track to jump 30% this year to $12.8 billion, more than four times the amount paid out by Uncle Sam in 2015. This is just over 1% of the annual Medicare budget, which will top $1 trillion this year.

The process of privatizing Medicare has so far been surprisingly uncontroversial so far, possibly because it doesn’t fit easily into a TikTok video.

Is it a good thing? Maybe. Consumers are certainly voting with their feet. Medicare Advantage plans typically operate through HMO or PPO networks, which give them greater control over costs. Most Advantage plans include benefits not offered by traditional Medicare — typically free prescription drug coverage, and vision, hearing and dental coverage. But Advantage plans don’t have to cover hospice, and there is some evidence that those who need the most care are apt to switch back to traditional Medicare.

Due to rules laid down by Obamacare, insurers offering Medicare Advantage plans must spend at least 85% of their revenues on actual care — meaning profits and overhead are capped at 15%. Which means that if the companies offering Medicare Advantage really do provide superior insurance to traditional Medicare, they are also doing so for 15% less.

Harvard’s T.H. Chan School of Public Health and health tech company Invalon are currently engaged in a deep dive into the mechanics and economics of Advantage. Initial findings seem mixed. Interestingly, they have also found that those enrolling in Medicare Advantage are on average poorer than those enrolling in traditional Medicare. Advantage enrollees are twice as likely to be people of color, and on average earn less, have lower wealth, and are less likely to live in affluent neighborhoods.

Is Medicare Advantage offering its customers better health outcomes, but at lower cost? Time will tell.