AMA Calls For End of Government Subsidies To Insurance Industry in Bush’s Medicare Plan

The funding provided in George Bush’s Medicare D plan for Medicare Advantage plans is an example of corporate welfare which does not benefit patient care. Under the program, insurance companies are provided more money than it costs to care for patients under the government’s Medicare program, despite the insurance companies cherry picking healthier patients. The American Medical Association has repeated their call to eliminate the additional funding provided to this program:

The American Medical Association renewed its call for fiscal neutrality between Medicare Advantage and traditional Medicare, pointing out the gross inequity in payments between the two Medicare programs.

“Right now the government is paying health insurance plans that administer Medicare Advantage, on average, 12 percent more per person than it spends on patients enrolled in traditional Medicare,” said AMA Board Member Cecil Wilson, MD. “With Medicare payments to doctors who care for seniors slated for a 10 percent cut next year, Congress must put the money used to subsidize the insurance industry to better use.”

At the AMA’s Annual Meeting late last month, America’s physicians sent a resounding message to Congress – eliminate the Medicare Advantage subsidy. AMA policy clearly states that subsidies to private plans offering alternative coverage to Medicare beneficiaries should be eliminated, and that these private Medicare plans should compete with the regular Medicare program on a fiscally neutral basis.

The financial motivation provided to the insurance companies also results in fraudulent sales tactics. I frequently see patients who have been signed up for these programs with no understanding of what they have signed. Often they say that they were only told that signing would result in lower health care costs, when in reality many of these plans carry copays which are higher than the governemnt’s Medicare copay. I’ve previously reported on investigations of fraudulent sales tactics in Oklahoma, and hope they are extended to additional states. While far less attention has been paid to the Medicare Advantage plans than other aspects of health care policy, Barack Obama did speak out against the plans in May.

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