While there has been a lot of attention paid to the ways in which George Bush’s changes to Medicare have benefited insurance companies, such as by not allowing negotiations over price, the benefits to insurance companies from Medicare Advantage plans has received less attention. Besides the political implications of the manner in which Bush has used his Medicare plans as a tremendous corporate welfare program to benefit his major contributors, there are aspects of the plan which health care consumers need to better understand. The Argus provided such warnings yesterday:
Targeted by aggressive marketers, some East Bay seniors are switching to Medicare Advantage plans they don’t fully understand, only to discover they can no longer see their longtime doctors and have severely limited their choice of specialists.
The plans are beneficial for some people. But consumer advocates advise seniors to proceed with caution and to seek free counseling before making a decision.
Limited choice of doctors? It is certainly ironic that the Republicans have devised a plan which suffers from one of the problems conservatives usually complain about in foreign plans.
While those who shop carefully might receive advantages, many do not as a consequence of dishonest marketing of Medicare Advantage plans. Private insurance companies receive twelve percent more to care for Medicare patients than those covered under the government’s Medicare program despite often cherry picking the healthier patients. So much for Republicans trusting the free market to provide services more economically. Rather than being used to provide benefits to beneficiaries as mandated by law, the money is largely used to increase corporate profits at the taxpayers’ expense. This provides considerable motivation to deceive seniors into joining the plans, with many plans paying salespeople a bounty for each person they sign up, without caring what they do to make the sale.
The New York Times reviewed the improper sales tactics used last spring, and last fall the Times reviewed audits reports on the Medicare Advantage plans. In an editorial last month they called on Congress “to eliminate the unjustified subsidies that give private plans a competitive advantage over traditional Medicare.” The editorial outlined some of the problems:
As Robert Pear reported in The Times last week, unscrupulous insurance agents have tricked people into dropping traditional Medicare coverage and enrolling instead in private plans that do not meet their needs. Agents typically receive $350 to $600 for each patient they enroll in a private plan. Some try to boost sales by pretending to be Medicare officials, forging signatures or hiding the fact that a patient’s doctor will not be part of the private plan. Others barge into homes and use high-pressure tactics to push poor, semiliterate people into a private plan.
The American Medical Association has also called for fiscal neutrality between Medicare Advantage and traditional Medicare. CBS News reported on the deceptive sales practices being used to sell the plans last summer. Barack Obama spoke out against the plans while campaigning in Iowa.
While anecdotal evidence might not be representative, I’ve found that the vast majority of patients enrolled in Medicare Advantage plans have no understanding of what they are signed up for. The Oklahoma insurance commissioner provides just one example of a state investigating and finding the same problems. The insurance commissioner found that many who thought they were signing up for simply a drug plan were being signed up by Humana into their Medicare Advantage plan.
Many patients have told me that salespeople tell them the plan is only a supplement to their regular Medicare. Sometimes salespeople bribe the residents of a senior citizen complex to attend a meeting with meals or other incentives, and then use hard sell tactics to get the bulk of them to sign up without understanding what they are signing. I’ve even seen patients enrolled in Medicare Advantage plans who do not recall ever signing anything. Possibly they did sign something, but who know what they were led to believe they were signing at the time.
As The Argus warns above, those who sign up in plans could find that their physician does not accept their plan. This month I had one patient have to postpone surgery until she could get out of a plan that wasn’t accepted. I’ve also seen a number of patients wind up with higher copays or a higher deductible than they had under Medicare. Sometimes the plans offer benefits not included in the usual Medicare program, but there could be a catch. I have one patient who signed up for a plan that includes dental coverage, but not a single local dentist accepts the plan. The plans are also a nuisance for physician offices when patients do not realize their plan has changed. Even Medicare does not realize when patients have switched for a while. Quite often I’ve seen letters from Medicare requesting money back which they paid on patients months earlier, but Medicare. the patient, and the physician were all unaware of this at the time.
Sometimes patients might benefit from Medicare Advantage plans if they have the opportunity to investigate their options and receive honest information as to what is covered. Those who benefit the most are generally those who choose to purchase higher priced plans as opposed to the plans people are typically placed into without their knowledge. Greater effort needs to be taken to weed out the deceptive sales tactics, and when Medicare is strapped for money their is no justification for paying these plans an extra twelve percent to care for patients.
(Cross posted at The Carpetbagger Report)