Medicare Advantage

Seniors Worry As Medicare Advantage Is Threatened : NPR:

For more than 40 million senior citizens, questions about plans to overhaul the nation's health care system come down to one word — Medicare.

Bills being considered in Congress look to cut $400 billion or $500 billion from the growth of Medicare over the next decade. About a quarter of those savings would come from something called Medicare Advantage. It's a popular program that allows seniors to choose privately run health plans that offer all the services covered by Medicare — plus extra benefits like dental and vision care.

Nationwide, about 25 percent of senior citizens are enrolled in Medicare Advantage plans. In Florida, the plans are even more popular — nearly a third of the state's 3 million-plus seniors are enrolled in one plan or another.

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While seniors love it, the government's problem with Medicare Advantage is that it has steadily gotten more expensive. Across the country, the government is now paying, on average, 14 percent more for Medicare Advantage plans than it spends on traditional Medicare.

"It makes no sense," says Marsha Gold, a health care analyst with Mathematica, a policy group. Medicare Advantage plans were created to offer choice for senior citizens and to introduce some competition for traditional Medicare, she says.

"The whole point of this," she says, "was to have a level playing field. Why should you be giving them more money?"

Under the health care overhaul plan being considered in the Senate Finance Committee, more than $100 billion would be cut from Medicare Advantage over 10 years. Democrats see the cuts as a way to slow down the rising cost of Medicare. But opponents say the cuts will force providers to eliminate some benefits to seniors.

The fundamental rationale for the creation of Medicare went like this: "While they are working, people will get health care coverage from their employers. After they retire, they can no longer get the coverage there, so the government needs to provide it." Now, tens of millions of people of working age don't have coverage from their employers and can't get it elsewhere. Why is a person over 65, who can't get coverage on their own or from an employer, more deserving of health coverage from the government than is a person who is under 65 who also can't get coverage on their own or from an employer?

The fundamental rationale for the creation of Medicare Advantage went like this: "The government has a monopoly on the provision of Medicare health coverage. The government is inefficient and slow to innovate. If we give senior citizens the option to take their Medicare funding to private insurance carriers, the operation of the private sector and market economics will mean that, for the same federal funding, we will get better coverage and delivery of care to our senior citizens." Now, for a significant portion of Medicare Advantage plans, that rationale has proved false. Why should we pay 14% more to private carriers for them to provide coverage to a subset of Medicare recipients?

I can absolutely understand why senior citizens who rely on Medicare and Medicare Advantage for their health care are very nervous about changes to it. They rely on it, and have few if any alternative routes to care. They also HAVE it and feel like it's THEIRS, that they are entitled to it. Many of those under 65 have NOTHING in the way of health care benefits, and also have few if any alternative routes to care. Why is a retired person, over 65, entitled to have his or her health care entirely paid for by the government, while a family of four, with two working parents, gets nothing at all from the government toward their health care? (In fact, by virtue of the Medicare tax deducted from their paychecks, they are actually paying for the health care benefits of those over 65.) The simple fact of policy incumbency should not equal entitlement.

Medicare is not a savings program. It is a cross-subsidy. The working population pays taxes that are used to pay for the health care of retirees and the disabled. The last thing I am advocating is the elimination or diminution of Medicare. If it were up to me, I would lower the eligibility age for Medicare to zero. That would be fair. The current situation is not -- the fact that it works for some of the population cannot be allowed to obscure the fact that it is abjectly failing a large portion of the rest. Furthermore, it is an absolutely false choice for anyone who likes the current situation to say "Don't change anything! I want to keep what I have." The upward spiral in costs makes it fundamentally impossible to continue the current system indefinitely into the future. Things will change. The question is whether we will take control of the wheel and steer the system in a new, sustainable direction, or simply let it continue toward the fiery wreck that is otherwise in its path.