OPINION | MEDICARE ADVANTAGE JUST KEEPS GIVING – TO INSURERS

Have you ever wondered why at the end of every year private insurers spend millions on advertising to convince older Americans to buy into their so-called Medicare Advantage plans?

The answer is simple: That's where the money is. University of California health economist James Robinson has described Medicare Advantage, also known as Part C, as "the most lucrative niche in the insurance market."

Medicare Advantage is a private alternative to traditional Medicare. It was designed by Congress in the early 2000s, ostensibly to encourage health insurers to find "innovative ways" to provide better care at a lower cost to folks over 65 on Medicare. Instead, the "innovation" is helping private health insurance firms pad their bottom lines with funds from the Centers for Medicare and Medicaid Services - financed by the deductions on every American's paycheck.

The firms that sell the Part C plans are paid a set amount for each person they enroll out of the nation's Medicare funds. The enrollee is guaranteed the same Part A (hospitalizations) and Part B (doctors' visits and services) benefits of traditional Medicare, but the private insurer can offer other benefits like vision and dental coverage not typically covered by traditional Medicare.

The barrage of advertising, featuring the likes of old-timers like Joe Namath, William Shatner and Jimmy Walker, touts those extra benefits, although some come with significant co-pays and require the enrollee to use designated networks. Some even promise gym memberships and free rides to doctors offices as come-ons.

Because the Advantage plans' advertising blitzes have been successful in luring seniors from traditional Medicare to Medicare Advantage, there's been a growing concern that it may be causing a drain on the Medicare system, which we all know is already under stress because of the nation's aging population and extended lifetimes.

An investigation by The New York Times last year provided a glimpse into what prompted that concern.

Medicare Advantage insurers get paid a set amount for each person they cover, but they get more for sicker enrollees. The paper viewed dozens of fraud lawsuits, inspector general audits and investigations by watchdogs that showed how major health insurers exploited the program to inflate their profits by billions of dollars.

"And the insurers, among the largest and most prosperous American companies, have developed elaborate systems to make their patients appear as sick as possible, often without providing additional treatment, according to the lawsuits," the paper reported.

Another Times' story described how the giant health insurer Anthem (now known as Elevance Health) paid more to doctors who said their patients were sicker.

"And executives at UnitedHealth Group, the country's largest insurer, told their workers to mine old medical records for more illnesses - and when they couldn't find enough, sent them back to try again," the story said.

"Each of the strategies - which were described by the Justice Department in lawsuits against the companies - led to diagnoses of serious diseases that might never have existed. But the diagnoses had a lucrative side effect: They let the insurers collect more money from the federal government's Medicare Advantage program."

As a result, a program designed to help lower health care spending has instead become substantially more costly than the traditional government program it was meant to improve.

According to the Times report: "Eight of the 10 biggest Medicare Advantage insurers - representing more than two-thirds of the market - have submitted inflated bills, according to the federal audits. And four of the five largest players - UnitedHealth, Humana, Elevance and Kaiser - have faced federal lawsuits alleging that efforts to overdiagnose their customers crossed the line into fraud."

It added that the government now spends nearly as much on Medicare Advantage's 29 million beneficiaries as on the Army and Navy combined. Plus, the additional diagnoses led to overpayments of $12 billion in 2020 alone, enough to cover hearing and vision care for every American over 65.

It's all yet one more example of how America's failure to enact real health care reform continues to make our health system the most expensive in the world, while its outcomes are mediocre at best.

Instead of considering a national health insurance system like most of the rest of the world has, Congress uses the one efficient single-payer system the U.S. has - Medicare - to throw a sop to private insurance companies and the health care industry, allowing them to continue their wasteful but profit-making ways.

How long are we going to allow this to continue? How long can we?