Guest Commentary: Former lawmaker says Medicare Advantage is not the answer

Unlike Medicare Advantage, the Centers for Medicare & Medicaid Services and traditional Medicare plans work directly with hospitals and doctors to create value. The difference is that CMS brings health care providers together in one payment directly, rather than a payment to an insurance company that contracts with providers.”

Ray Seigfried of Wilmington is a former 7th District state representative. He also taught health policy and reimbursement and was a senior hospital administrator.

By Ray Seigfried

Health care is complicated. In America, unlike anywhere else, our health care is built on a free market economy. It operates on competition, and for competition to exist, people must have a choice, which makes our health care system pluralistic.

This means you have a choice in the doctor and hospital you need. Medicare plans are a good example of choice. Medicare health plan decisions affect how much you pay for coverage, what services you get, what doctors and hospitals you can use, what medications are covered, and your overall quality of care.

For all these reasons, selecting a Medicare plan is a very individual decision. Delaware state pensioners have a choice with Medicfill, a regular Medicare insurance program. A choice without any delays from preauthorization. A choice of doctors and hospitals that best fit their needs.

But, last year, the state decided to mandate a change from Medicfill (a Medicare health plan) to Medicare Advantage (a privatized health plan), which was not transparent, nor did the state follow its administrative procedures. One can only imagine that Claire DeMatteis, secretary of human resources, and the State Employee Benefits Committee were single-minded in negotiating with insurance companies, only to obtain an alternative health plan that substantially reduced the state’s unfunded liability.

If this were the objective, their solution could be acceptable, but the genuine concern is about pensioners’ health, which the state shares responsibility for ensuring. Pensioners have had a long-standing “customary health insurance” through a Medicare plan that allowed choice, and the state has known from day one its financial responsibility.

The fact remains there are substantial differences between Medicare and Medicare Advantage. A growing body of evidence has demonstrated significant concerns over the focus of Medicare Advantage plans. Since it started in 1997, it has not provided evidence of improved quality or lower cost compared to similar Medicare plans. But what it has shown through this opportunity is a higher profit margin. Nearly every major insurance company has been accused of or has settled allegations of Medicare Advantage fraud. They are abusing the program by making the patient appear sicker than they are to obtain higher reimbursement from the Medicare trust fund.

Here are some of the facts to back this up:

• Judith Stein, executive director of the Center for Medicare Advocacy, stated, “Not only are wasteful payments to private Medicare Advantage plans straining Medicare’s finances, but they are also crowding out expansion of benefits for the half of Medicare beneficiaries who choose to remain in traditional Medicare.”
• The Alliance for Health Policy reported that, in 2020, Medicare Advantage billed the Medicare trust fund 9.5% higher than equal billing by regular Medicare. The Centers for Medicare & Medicaid Services performed a code adjustment to bring the Medicare Advantage risk score down to 3.6%, resulting in a $12 billion excess payment from the Medicare trust fund. This is important because the Medicare trust fund has already projected that it will only be able to fund 91% of Part A payments by 2026. CMS is looking into additional changes to risk adjustment rules for Medicare Advantage.
• Kaiser Health News reported that Medicare Advantage plans overbilled the federal government by millions between 2011-13, with some plans overbilling an average of more than $1,000 per patient per year.
• The Centers for Medicare & Medicaid Services has informed Medicare Advantage that its marketing TV advertisement practices must be approved by CMS first to prevent additional false advertisements.
• Kaiser Health News reports that Medicare Advantage plans are sending enrollees home from skilled nursing and rehabilitation centers to increase their profit before they are healthy enough to leave.
• In Washington, House Resolution 3173 is working its way through Congress, the Improving Seniors’ Timely Access to Care Act of 2021, mandating Medicare Advantage plans to report to CMS the extent of their use of prior authorization and rate of approval or denials.
• In February this year, over 70 members of Congress signed a letter to the Honorable President Joseph R. Biden and the Honorable Xavier Becerra, secretary of the U.S. Department of Health & Human Services, requesting reform to all Medicare Advantage plans. Specifically, they requested to finalize and enforce the proposed rule on prior authorization in the plans; to require the plans to cover services from any medical provider that accepts Medicare’s approved rate; to stop overpayments by developing a more accurate risk-scoring model and prohibiting unscrupulous methods of increasing care costs; and to reinvest the $46.5 billion annual savings from Medicare Advantage profiteering into improvements to traditional Medicare.

Medical insurance companies that issue Medicare Advantage plans have done nothing more than increase their profits, and Delaware should not use pensioners as profit pawns for their continued effort. There is hope that the Retiree Healthcare Benefits Advisory Subcommittee  can change the direction and recommend an alternative focused on value that will reduce cost and increase quality that will include everyone. Cost is a significant concern for all participants in health care. It is a well-known fact that U.S. health care system is well over double the cost of any other health care system in the world. The need to reduce costs is urgent. When approved, Medicare Advantage was supposed to reduce costs but, surely, it has not.

Over the past few years, the Centers for Medicare & Medicaid Services has been working through accountable care initiatives with hospitals and doctors, not just to bring the cost down but, equally as essential, to bring the quality up. This year, it is announcing innovative initiatives in regular Medicare that will provide real health care value or higher quality at a lower cost. Unlike Medicare Advantage, CMS and traditional Medicare plans work directly with hospitals and doctors to create value. The difference is that CMS brings health care providers together in one payment directly, rather than a payment to an insurance company that contracts with providers. Delaware should take time and effort to go back to regular Medicare and work with pensioners, without the focus of privatizing health insurance.