CBS News Exposes Medicare Advantage Plans

I’ve posted many times on the problems of the Medicare Advantage plans, as recently as this morning. CBS News is doing an investigative report on these plans. Medicare Advantage plans are private plans which treat Medicare patients, but receive more money per patient than is spent by the government’s Medicare program. Among other findings, CBS News found that more money is going to the insurance companies than is required by law:

But how much of that money is going back into the pockets of the insurance companies?

“Well, it’s required by law: 25 percent goes back to the federal treasury, 75 percent goes back to the beneficiary,” Norwalk said.

So the insurance companies are doing this, what, out of the kindness of their hearts, asked Keteyian?

“There, there would be, I’m sure, some small amount to administer the additional benefits,” Norwalk said.

But CBS News has found that’s not always the case. An independent report found when it comes to the fastest-growing plans, known as private fee-for-service, half of that extra money goes back to the insurance companies. All these private Medicare plans are expected to cost taxpayers an additional $54 billion over the next five years.

“Taxpayers are losing; people in Medicare are losing,” Hayes said. “And the structure of Medicare as a national treasure that we need to rely on moving forward, is being undermined.”

So much so that key Congressional Democrats now want to cut payments to private plans. The insurance industry is fighting back with a direct mail campaign urging seniors to contact their representatives.

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