In addition to the prescription drug program, George Bush’s Medicare Plan provided for extra payments to private insurance companies to cover Medicare patients. Under these Medicare Advantage plans it now costs about twelve percent more to cover Medicare patients than under the government program, even though the private companies often cherry pick the healthiest patients. The extra payments also provide incentive for fraud. In light of the problems which have been identified with these plan, The New York Times has an editorial today calling for an elimination of the subsidies:
Heavily subsidized private Medicare plans are continuing to prey on elderly Americans despite state, federal and industry efforts to stop them. It is yet another reason to rein in these operations by eliminating their unjustified subsidies.
These plans are a financial drag on Medicare as the government pays them about 12 percent more, on average, than the same services would cost in the traditional Medicare program. All too often, the private plans are an ethical horror as well.
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…
Although federal officials claim the number and severity of sales abuses have declined, they remain a dark stain on the ethical performance of private plans. Federal and state agencies need to redouble their efforts to root out abuses, and Congress ought to eliminate the unjustified subsidies that give private plans a competitive advantage over traditional Medicare.
