Here’s the rub. Medicare Advantage pays more to providers than traditional Medicare because they take risk in providing care to enrollees. They also often provide benefits beyond what traditional Medicare would provide. However . . . they do so by having more money directed to them for funding. As noted below, to the tune of some $43 billion. This means that since 2004, some $43 billion dollars was directed away from the traditional Medicare program, beyond what would have been paid for the same services in the traditional Medicare program. Again, the caveat is that some of those services would not have been covered or paid for by the traditional Medicare program.
In early 2008 there were 44.2 million Medicare beneficiaries. If one does the math, these extra payments amount to just shy of $1,000 per beneficiary over the 5 year time period. Not much you say. Perhaps. Perhaps not. The real issue is that Medicare Advantage was created to look for ways to SAVE on expenditures on Medicare. Instead, they have become the recipients of largess. Why? Because the programs in many cases are VERY GOOD and reflect more of what Medicare should look like but does not.
The key is for Congress to address the looming Medicare financing issues. This can only be done by a combination of tax and fee adjustments. This means that small adjustments in the Medicare payroll tax rate may be needed. It also means that small adjustments in the Medicare premium schedule may be needed. The continued attempt to adjust the balance sheet by excessive taxation on financially stable seniors is untenable and will not solve the problem.
Either Medicare is insurance or welfare. If it is both, the program will become increasingly divided and two tiered. If means is an issue, then subsidize that means via Medicaid not extra premiums on seniors who have already paid extra taxes into the program via the payroll system. Higher co-pays, deductibles and the like will also have to factor into the mix.
Solutions will not be easy. Medicare Advantage may be one such solution . . . but it does not address the entire problem . . . obi jo
$43 Billion In Extra Payments Have Been Made To Private Medicare Advantage Plans Since 2004
Private Medicare Advantage (MA) plans will be paid $11.4 billion more in 2009 than what the same beneficiaries would have cost in the traditional Medicare fee-for-service program, according to a new report released today by The Commonwealth Fund. This new analysis,The Continuing Costs of Privatization: Extra Payments to Medicare Advantage Plans Jump to $11.4 Billion in 2009, estimates that since MA was enacted in 2004, $43 billion in extra payments have been made.
Seniors may see some Medicare Advantage benefits shrink
Big changes are coming to Medicare benefits received through some private plans, and they affect private insurers that provide coverage to Medicare enrollees under programs known as Medicare Advantage plans, which can sometimes offer a larger array of benefits for certain enrollees. Recently, the Obama Administration put providers on notice that reimbursements could fall and plans with low enrollment could be scrapped next year as the nation deals with financial issues in Medicare and Social Security. The changes affect private insurers that provide coverage to Medicare enrollees under programs known as Medicare Advantage plans, which can sometimes offer a larger array of benefits for certain enrollees. Frustrated by higher costs associated with the alternative program, the Obama administration recently put providers on notice that reimbursements could fall and plans with low enrollment could be scrapped next year as the nation deals with financial issues in Medicare and Social Security.