DAILY TRIFECTA: Freedom Is Just Another Word For Crappy Healthcare

Medicare's advantage to health insurers

THE SET-UP: For years Americans were warned that “socialized medicine” and “universal healthcare” would lead to “rationing” by faceless government bureaucrats empowered to make life and death decisions for us and our families.

Americans were also warned that socialized medicine threatened to unravel the very fabric of their God-fearing, freedom-loving nation. Simply put, universal healthcare led to socialism and that portended the end of America as we know it.

Americans heeded those warnings for decades.

As far back as Ronald Reagan's famous radio address on the "evils" of “socialized” medicine in 1961, Americans heard about the slippery slope of universal, government-run healthcare and how it’s only “a short step” away from complete government control over the destiny of each and every American:

Once you establish the precedent that the government can determine a man’s working place and his working methods, determine his employment, from here it's a short step to all the rest of socialism -- to determining his pay, and pretty soon your son won’t decide when he’s in school, where he will go, or what they will do for a living. He will wait for the government to tell him where he will go to work and what he will do.

And what was Reagan’s alternative to the end of personal autonomy? It was “our free enterprise system,” of course, and medicine that had reached “the greatest heights that it has in any country in the world”!

Well, when Ronnie put it that way … the choice was clear … we could embrace terrible healthcare in a commie dystopia or stick with the best healthcare known to mankind in a freedom-loving paradise.

And that simple binary paradigm held until a Democrat named Harris Wofford ran an insurgent-style campaign specifically on healthcare in a 1991 special election for a Senate seat in Pennsylvania. He tapped into growing dissatisfaction and he won. Healthcare became a perennial political issue almost overnight and Bill Clinton followed him by promising healthcare “reform” in his 1992 Presidential campaign.

That led into Hillary Clinton’s attempt in 1993 to secure universal healthcare through a complicated hybrid system of “managed competition.” Hillarycare’s complicated formulation preserved both employer-based coverage and the health insurance business. As such, it reflected Americans’ continuing unwillingness to embrace “socialized medicine.” Reagan’s simple dichotomy between “crappy healthcare or freedom” worked yet again. The GOP ultimately torpedoed Hillary’s ill-fated attempt with the now-legendary “Harry and Louise” ads … and the gaps in the for-profit healthcare system grew.

The “socialized medicine” attacks hit again in 2009-10 when President Obama pitched a hybrid, public-private reform that ultimately became the Affordable Care Act. Opponents derided its market-based, insurance-preserving approach to universal coverage as a “socialist takeover” by “government bureaucrats” eager to micromanage and ration healthcare. Some would even sit on government-run death panels.

When reform finally came with the Affordable Care Act, it doubled-down on the profit motive and it further empowered corporate bureaucrats who deal with patients and doctors in ways not dissimilar to those Reagan predicted for “socialized medicine” in 1961.

It’s an irony that eludes the ACA’s critics to this day.

Now, market-based healthcare is being rationed and rationalized by faceless corporate bureaucrats incentivized to treat sick and injured Americans like beads on an abacus. And at the same time they take “Advantage” by denying needed care to Americans who’d otherwise be covered by “government-run” Medicare, taxpayers are being defrauded by those profit-motivated insurers as they bill for services not rendered because they’re not needed.

Ultimately, America’s world-beating healthcare is a product and like a First Class airline ticket it’s a privilege that comes with a hefty price. That’s why one-in-four Americans “skipped or postponed getting the care they need simply because of the cost,” according to a KFF poll from earlier this year.

Go figure. - jp

TITLE: Problems with Medicare Advantage Plans Keep Mounting
https://www.kiplinger.com/retirement/medicare/problems-with-medicare-advantage-plans-keep-mounting

EXCERPTS: Medicare Advantage (MA), the private insurance alternative to traditional Medicare, is now the choice of more than half of Medicare enrollees. And it’s expected to continue to grow. While most enrollees are satisfied with their plans, MA faces mounting criticism for denying and delaying some needed care while costing taxpayers billions more than government-run, so-called fee-for-service, traditional Medicare.

“Part of the promise of having private plans participate in Medicare was that they could deliver better care more efficiently and they have done neither. The care outcomes at best are decidedly mixed,” says David A. Lipschutz, co-director of the Center for Medicare Advocacy.

According to KFF Health News, the recent presidential election may accelerate the growth of MA: Donald Trump “and many congressional Republicans have already taken steps to aggressively promote Medicare Advantage. And Project 2025, a political wish list produced by the conservative Heritage Foundation for the next presidency, calls for making insurer-run plans the default enrollment option for Medicare.”

Nationwide, according to KFF, there are nearly 4,000 Medicare Advantage plans, with the average Medicare beneficiary having a choice of 43 Medicare Advantage plans. But the Senate report noted that the largest MA insurers, UnitedHealthcare, Humana and CVS-Aetna, account for 58% of Medicare Advantage enrollees.

While patient satisfaction ratings cite ease of finding care and provider choice as positives of Medicare Advantage, investigators have found areas of concern. For example, a study in the Journal of Clinical Oncology found that MA patients who needed complex cancer surgery had higher short-term death rates and less access to experienced hospitals than traditional Medicare enrollees.

Other investigations have found that patients who need services after being hospitalized, known as post-acute care, can run into trouble when Medicare Advantage plans require patients to get authorization before receiving such care.

The U.S. Senate Permanent Subcommittee on Investigations, using data from the three largest MA insurers, found they “are intentionally using prior authorization to boost profits by targeting costly yet critical stays in post-acute care facilities.”

The Senate report echoed the findings of a 2022 investigation by Medicare’s inspector general, which found that some Medicare Advantage insurers sometimes wrongly delayed or denied Medicare Advantage beneficiaries' access to services they should have gotten.

The inspector general report said the plans also wrongly denied payments to providers for services, adding that these denials “may prevent or delay beneficiaries from receiving medically necessary care.”

Even when care is approved, the time-consuming pre-approval process harms patients, advocates say. Dr. Karl Sandin is chief clinical officer for the American Medical Rehabilitation Providers Association, which represents nearly 800 inpatient rehabilitation hospitals. Sandin says required MA pre-approvals delay rehab care, allowing patients’ medical conditions to deteriorate, making recovery more of a challenge.

The way MA insurers require prior authorization for rehab care, he adds, is “a very clear care-delay process,” not an effort to achieve efficiency. “It's just because insurance companies don't want to spend money.”

MA is hugely profitable compared to other insurance markets, according to an analysis from KFF. In 2021, the analysis found, Medicare Advantage insurers reported gross margins averaging $1,730 per enrollee, more than double the $745 margins reported by insurers in the individual/non-group market and the $689 margins for the fully insured group/employer market.

One reason may be what’s called “upcoding,” which is when an insurer assigns an inaccurate billing code to a medical procedure or treatment to increase reimbursement.

Another inspector general report released in October said upcoding raises the costs paid by the government. “Taxpayers fund billions of dollars in overpayments to MA companies each year based on unsupported diagnoses for MA enrollees,” according to the inspector general.

TITLE: How Health Insurers Racked Up Billions in Extra Payments From Medicare Advantage
https://www.wsj.com/health/healthcare/how-health-insurers-racked-up-billions-in-extra-payments-from-medicare-advantage-9d4c8a89

EXCERPTS: Throughout the past year, The Wall Street Journal investigated how UnitedHealth Group and other giant insurers extracted billions in extra payments from the $450-billion-a-year Medicare Advantage system, the federal government program that outsources health benefits to private companies.

Here are some key findings:

1. Insurers packed on diagnoses that made them more money.

Medicare Advantage insurers diagnosed patients with conditions that triggered extra payments of $50 billion from 2019 to 2021, even though no doctor ever treated the diseases.

For instance, more than 66,000 Medicare Advantage patients were diagnosed by their insurers with diabetic cataracts even though they had already had surgeries that cured the condition, making it anatomically impossible for them to have it.

In other cases, the Journal found patients who were reported by their insurers to have HIV, the virus that causes AIDS, but didn’t receive any of the lifesaving treatments that doctors recommend for all patients with the condition.

2. Insurers sent nurses to find diagnoses that doctors hadn’t.

Insurers dispatched their own nurses to visit patients at home and diagnose them with conditions that their doctors hadn’t, triggering an average of $1,818 in extra annual payments during each visit from 2019 to 2021—$15 billion in total.

UnitedHealth generated far higher payments per visit, averaging $2,735—about three times the level of all other Medicare Advantage insurers. UnitedHealth covers about one-third of Medicare Advantage members.

3. Insurers got paid to cover patients who were already getting their healthcare elsewhere.

Medicare Advantage insurers collected billions of dollars a year in premiums to provide medical coverage to patients who used the Department of Veterans Affairs health system—and not Medicare—for some or all of their healthcare needs.

4. Doctors who work for UnitedHealth generated billions of dollars in extra payments for their employer by adding more diagnoses.

UnitedHealth provided doctors with checklists of possible diagnoses for their patients and paid bonuses for completing them.

When patients moved from traditional Medicare, where doctors aren’t encouraged to find additional diagnoses, to UnitedHealth Medicare Advantage plans and received care from the company’s doctors, they appeared to acquire previously undiagnosed maladies, according to the Journal’s analysis of Medicare data between 2019 and 2022.

Under the system Medicare uses to calculate payments, those patients got 55% sicker, on paper, in their first year in UnitedHealth plans, an increase equivalent to every patient getting newly diagnosed with HIV and breast cancer, the analysis showed.

5. Sicker patients who needed expensive treatments like nursing-home care left Medicare Advantage at high rates—suggesting that insurers may have been denying them costly coverage.

Medicare Advantage insurers netted $3.5 billion in savings from their sickest patients dropping out to return to traditional Medicare in the last year of life from 2016 to 2022, the Journal found.

The figure is a sign, experts said, that patients may not be getting the care they need through the private insurers. When patients leave Medicare Advantage, taxpayers pick up the full bill for their treatments.

The Journal’s analysis showed end-of-life patients fleeing Medicare Advantage plans were seeking one of the most commonly denied services—nursing-home care—at a rate five times higher than peers who were continuously enrolled in traditional Medicare.

TITLE: Medicare Advantage Is Scamming You
https://newrepublic.com/article/189804/privatizing-medicare-advantage-scam-claims-fraudulent

EXCERPTS: Congress created Medicare Advantage in 1997 to demonstrate for good and all, damn it, that the market economy could be more cost-effective at delivering doctor and hospital care. The privatization program succeeded in winning over the public: 54 percent of the Medicare-eligible population chooses Medicare Advantage.

Medicare Advantage looks to people over 65 like a better deal because it covers things traditional Medicare doesn’t, such as visits to the dentist or the eye doctor. Some plans even cover acupuncture! But if you get seriously ill and need to be referred to a specialist, Medicare Advantage isn’t so great. An April 2022 study by the Health and Human Services Department’s inspector general found that 13 percent of the referrals denied under Medicare Advantage would have been approved under traditional Medicare.

Medicare Advantage also shows that health care privatization is a lousy deal for taxpayers. Medicare Advantage costs the federal government 7 percent more per enrollee than traditional Medicare, according to an August 2024 study by the fiscally conservative Peter G. Peterson Foundation. For enrollees with similar health profiles, Medicare Advantage costs 22 percent more, according to the Medicare Payment Advisory Commission.

So, OK, Medicare Advantage charges the federal government more. Don’t I want, as a patient, more money to be lavished on my health care? The sickest customers do not. People in their final years of life left Medicare Advantage for traditional Medicare “at double the rate of other enrollees” between 2016 and 2022, the Journal reported in November. This exodus of expensively dying patients saved Medicare Advantage $10 billion during this period.

The challenge with all privatization schemes is that the private sector doesn’t aspire to save the government money. Why should it? Sometimes the market can be induced to do so in spite of itself through virtuous corporate management or vigilant government oversight. But it’s uniquely foolish to expect the market not to maximize profit on a commodity that people need as desperately as health care.

During his first administration, Trump issued an executive order that said Medicare Advantage, the privatized version of Medicare, “delivers efficient and value-based care through choice and private competition.” Mehmet Oz, the TV doctor Trump nominated to run the Centers for Medicare and Medicaid Services, disparages traditional Medicare and has called for massive expansion of Medicare Advantage. By remarkable coincidence, as of 2022 Oz owned a reported stake of $550,000 in UnitedHealth, Medicare Advantage’s largest participant.