Wednesday, October 6, 2010

A Grim Prognosis for Medicare Advantage

A Grim Prognosis for Medicare Advantage

By Barbara O'Brien
If you love your Medicare Advantage benefits, brace yourself for some disappointment.  in the next few years Medicare Advantage insurers probably will trim benefits and may drop out of the program altogether because government subsidies to the program are being cut.

But even though the policies are with private companies, taxpayers are subsidizing the benefits.  And taxpayers are not getting their money's worth.  A Medicare Advantage benefit costs taxpayers 14 percent
more than exactly the same benefit offered through regular Medicare in some parts of he country, the difference is as high as 20 percent.

Medicare Advantage makes Medicare more expensive for everyone.  According to the 
U.S. Department of Health and Human Services, all Medicare beneficiaries are paying for that 14 percent overhead with higher premiums, HHS says that this year these subsidies are adding about $3.60 per month to every Medicare premium.  And little of that 14 percent is providing benefits to seniors.  Instead, it is pocketed by the private insurance companies.  They use it to pay for administration and advertising, and they also take some of it in profits.

It's a sad fact that in our autumn years, nearly all of us will suffer increasing problems with our health.  For example, 
mesothelioma cancer rarely is diagnosed before the patient is 50, and mesothelioma treatment is expensive.  Private insurance companies don't want seniors as customers -- unless taxpayers are supplying the profits.

Last year, the trustees of the Medicare program said the part of Medicare that pays hospital bills would be out of money by 2017.  This year, because of the cuts to Medicare Advantage and other changes to the way Medicare is administered, the trustees said the hospital fund would be good until 2029.  More needs to be done, but we're moving in the right direction.

There are no plans to cut regular Medicare benefits.  In fact, the Medicare program is adding free preventive care and closing the Part D prescription coverage "doughnut hole".  But Medicare Advantage is turning out to be a luxury we can't afford.

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