Dems don't see fastball aimed at their head!
Democrats don't like Medicare Advantage (private Medicare plans offered by insurance companies but funded by Medicare). They are targetting Medicare Advantage for big cuts, starting in 2010. But Democrats don't seem to understand how these plans work - and they don't see the fastball that is aimed right at their head.
With 10.5 million seniors enrolled in Medicare Advantage plans, the insurance companies must be chomping at the bit to ring the alarm bell about how reduced funding will change their enrollees' Medicare benefits (and the insurance companies' profits). Humana got in trouble for jumping the gun and sending out a letter warning seniors about how health reform will hurt their Medicare benefits.
Democrats don't seem to realize that when seniors receive their Annual Notice of Change (ANOC) from their Medicare Advantage plans in late-October, they will be getting the message loud and clear. Plans will be changing for 2010 with higher premiums and higher co-pays for doctor visits and hospital stays. And the real cuts to Medicare Advantage are coming up for 2011 and 2012.
As an insurance agent I don't think Medicare Advantage is the best coverage for seniors. But seniors in these private plans are going to see changes in their benefits. (Sample enrollment numbers are: 32% in Arizona; 41% in Oregon; 36% in Pennsylvania; 34% in California and Rhode Island.)
It amazes me that Democrats don't see this fastball coming straight at them. The millions of seniors who pay attention to their "Annual Notice of Change"are going to be mad as hell - and Republicans will be happy to help them understand how they are being hurt by changes (forced by Democrats!). As a Democrat I would argue that the insurance companies are more concerned about their profits than the welfare of seniors enrolled in their Medicare Advantage plans, but I don't think this argument is going to go over very well. It's a bit more complicated than "You're Medicare IS changing!"
Will you please note the cite and source for your information referencing the medicare cuts, changes, et al. in your post? Without these,it is impossible to comment factually.
Thanks.
September 25, 2009 9:34 PM | Reply | Permalink
The numbers of seniors enrolled in Medicare Advantage come from the Kaiser Family Foundation web site, http://kff.org.
For 2010 it was reported in the press back in March that CMS (Medicare)would increase payements to insurance companies by less than 1% rather than the expected 8%. Stock prices of the insurance companies with Medicare Advantages plans tumbled on the news. Then the insurance companies put together their plans for 2010 and submitted them to Medicare in June.
What I wrote is not meant to defend Medicare Advantage. It is an alert that the fastball is coming right at the Democrats and will hit them in the head in late-October when insurance companies blame Obama and healthcare reform for the change in 10.5 million seniors' Medicare benefits.
Word is already out that some companies will be notifying seniors that their "free" Medicare Advantage plan will be costing them $40 next year. Hospital co-pays will be going up as well as doctor co-pays. One company in Arizona has hired four "retention specialists" to try to hold onto enrollees who are going to be upset with the changes.
Here in Arizona, private Medicare HMO's with no monthly premium have been around since the early 90's. There are many 80 year old seniors on limited incomes who are going to be shocked when they are asked to pay a $40 premium.
Republicans poured money into Medicare Advantage with the introduction of Part D in 2006. Enrollment in these plans doubled from 2006 to 2009.(See http://Kff.org) Republicans wanted to make these private plans more attractive than staying with Medicare and getting a Medicare Supplement.
Democrats keep repeating the fact that insurance companies have been paid 14% more per enrollee in Medicare Advantage plans and now this must stop.
Republicans always get the best slogans:"No new taxes!"; "Your Medicare benefits will be cut so illegal immigrants can get healthcare!"
Democrats get to explain "subsidies to insurance companies" and how they will cut billions from Medicare, while the Republicans will be saying, "See! We told you they'd pass the cost of healthcare reform onto seniors!"
September 26, 2009 11:43 AM | Reply | Permalink
One other source for my statement that big cuts are coming in 2011-2013 is HR 3200. That bill does not have death panels, but it does have instructions on how Democrats plan to reduce the 14% in overpayments for Medicare Advantage. It says payments to insurance companies will be reduced by 5% in 2011, 2012 and 2013 so that funding of Medicare Advantage will be the same as the average cost for people in "Original Medicare" as of 2013.
Of course these proposals will have to be in the final bill that is voted on.
September 26, 2009 12:33 PM | Reply | Permalink
You still have not delivered credible sources that deliver facts. 'It was reported in the press...' provides no factual basis (what was their report based on?).
You need to deliver facts, utilizing the cites and resources, that will provide the proof of what you are asserting in your post.
Without these, there is no substance, just your hypothesis and opinions.
September 26, 2009 1:26 PM | Reply | Permalink
try this:
http://www.nytimes.com/2009/09/24/health/policy/24medicare.html
September 27, 2009 12:26 AM | Reply | Permalink
from the link:
It's pretty clear from the article that plenty enough seniors in Senator Nelson's state disagree with Obama that their care and coverage is not improved by their Advantage plan, enough to worry the Senator.
And keep in mind that having to go back to regular Medicare (which some might have to do they had to pay extra for Advantage) would not just mean lack of preventive coverage, it would mean them having to handle more of the managing themselves, no network of caregivers, having to chose a drug plan, figuring out where and how to get other supplies and services, etc. On Advantage, its managed. Also, when you move out of a plan, it's often not easy to continue seeing the doctors in the plan, as they often give first preference to those in the plans they take....
The cuts in payments planned also probably worry some seniors who are in regular fee for service Medicare, some of them are probably quite aware of how unpopular taking Medicare is already becoming for a certain number of more select doctors they might like to have. The "you get to keep your doctor" promise may not be one that can be trusted for those on Medicare if Medicare continues to reduce payments.
September 27, 2009 12:52 AM | Reply | Permalink
It seems to me that the best antidotes to untruthful or misleading claims are truthful ones. Currently, Medicare subsidies to private insurers in the Advantage program are diverting dollars away from the standard Medicare program and thereby depriving many seniors of the full benefit of Medicare. These subsidies, however, have proved to be of only marginal benefit to Advantage subscribers despite the initial promises made by the insurers in asking for them. Once the entire Medicare population is accurately informed, I believe the balance of opinion will favor the cuts.
September 25, 2009 10:09 PM | Reply | Permalink
If we could accurately inform people about the benefits of universal single-payer healthcare coverage, we would have had such a system years ago. As for Medicare Advantage, the subsidies were not used to improve coverage for seniors so much as create marketing advantages. Dental benefits, free gym memberships, and no monthly premium for a plan that includes drug coverage makes Medicare Advantage plans very attractive to seniors.
When Part D was introduced, the average monthly premium was around $15.00. Using Humana as an example, the premium went up to $24 in 2008 and $42 in 2009. If you sign up for Humana's Medicare Advantage HMO you get the drug plan AND a free gym membership, plus a little dental coverage for $0 per month. Compare this to paying $200/month for a Medicare Supplement plus $42 for Part D. That's $242 vs $0.
I'm not advocating for Medicare Advantage because the devil is in the details - like hospital co-pays and doctor visits. And don't get cancer or you'll pay 20% of the chemo and radiation therapy bill.
The problem now is that cuts in payments to insurance companies will be passed on to seniors. I'm not so sure seniors are going to appreciate the economic and political arguments that seek to "accurately inform" them.
My thought is that Republicans have laid out a perfect trap for Democrats. If they cut benefits to seniors (10.5 million in Medicare Advantage)they walk right into the trap where Republicans will be happily waiting with their slogans like, "They're cutting your Medicare!"
September 26, 2009 12:49 PM | Reply | Permalink
You make good points, but where I disagree is with your contention that the Democrats are oblivious to this line of attack. In politics, unlike science or philosophy, attacks are rarely countered primarily by explanations, although explanations are often necessary. Rather, the best defense is often to launch an attack against the opponents that will resonate viscerally with the electorate. The Democratic healthcare reform proponents are already highlighting the evidence that it has been the Republicans who opposed Medicare and tried to dismantle it, and this feeds into recent polling results indicating that a very large majority of Americans see Republican opposition to healthcare reform as motivated by political considerations rather than genuine concern about the welfare of the people.
I believe it's also significant that the views of seniors on these issues are not monolithic. Many are sympathetic to reform efforts, even if the details confuse them, and the AARP is supporting reform, although without endorsing a specific proposal. It's probably unrealistic to expect most seniors to support reform enthusiastically, but I expect that their degree of opposition to specific elements will be too muted to overcome a national mood receptive to the need for change.
September 26, 2009 2:46 PM | Reply | Permalink
From my work with seniors I can say that there are many who are in favor of healthcare reform. But there are those who have been frightened by what they hear on Fox News. I spent an hour talking to two of my clients trying to convince them that Medicare IS a government program. I also told them they wouldn't be losing their Medicare Advantage program and that it won't change much for 2010. Then I went to a meeting and learned that their plan WILL change for 2010.
The trap Republicans have set is that it is difficult to take things away once they've been given.
According to an Associate Press account, Sen. Nelson of Florida introduced an ammendment to the Senate Finance Committee bill that would preserve extra benefits such as eyeglasses and dental care for seniors currently enrolled in Medicare private insurance plans.
“I don’t think it’s a good thing to go in and tell senior citizens, ‘What you have now, you have to give up,’ ” said Nelson. ”That is a nonstarter.”
I think I'll email Sen. Nelson and ask him if his bill covers free gym memberships as these are VERY popular benefits that come with Medicare Advantage plans here in Arizona.
September 26, 2009 4:34 PM | Reply | Permalink
I would think saving a couple hundred dollars a month (that is, not having to buy a Medicare Gap policy) would be even more popular than free gym membership -- and even by "those who have been frightened by what they hear on Fox News" -- or in the New York Times.
September 26, 2009 4:54 PM | Reply | Permalink
Question (and I don't know the answer): Is AARP "supporting reform" because its sales of Medicare GAP policies have been savaged by Medicare Advantage?
That is, because Medicare Advantage is subsidized, GAP policies can't compete -- at least for the young-olds (ages 65-75) where the GAP profits are. And AARP would love to see Medicare Advantage bite the dust?
Note: AARP farms out its Medicare Advantage programs to United Health (presumably, AARP's income -- sort of a forwarding fee -- is not great).
September 26, 2009 4:48 PM | Reply | Permalink
AARP also puts its name on two Medicare Advantage plans: AARP Medicare Complete 1 and 3 by Secure Horizons (owned by Unitedhealth). So AARP makes money on both supplements and Medicare Advantage.
The private Medicare plans, before Part D, included drug coverage. So I'm not really sure who the Part D was for. All it has done is force people to pay $40+ per month for a drug plan - and make Medicare Advantage plans which include the drug plan (often for $0 per month) even more attractive.
Stay tuned for late-Octobe when seniors get the info on changes to their plans. It should be interesting to see how it all plays out - and how Republicans play it.
September 26, 2009 11:17 PM | Reply | Permalink
If at the hands of private insurance, their rates are skyrocketing with the rest of us ... why exactly would this be bad for health care reform? Considering congress hasn't passed anything that would affect those rates, it seems impossible to argue that 2010 price increases are caused anything other than the status quo.
Doesn't this play in to the democrat's hands?
"Your benefits just went down, and your costs
just went up ... isn't it time to fix the problems with medicare? Tell your congressperson that you support comprehensive change that will ensure better care at less cost."
September 26, 2009 3:30 PM | Reply | Permalink
How about this for a winning slogan:
"We took away a third of your Medicare Advantage benefit in 2010 and we'll take away the remainder in the next two years. And we may do worse. Don't you think it's time you supported health insurance reform?"
September 26, 2009 5:00 PM | Reply | Permalink
Unfortunately, Obama's comment on this topic was poor - "Change is hard."
http://blogs.abcnews.com/george/2009/09/obama-defends-medicare-advantage-cuts.html
This blogger hits the nail on the head. Or to use the baseball analogy - has hit the ball out of the park.
September 26, 2009 5:10 PM | Reply | Permalink
The Medicare Advantage mess should be discussed much more than it is - why is it that Republicans can claim that private insurers are more efficient and yet simultaneously defend the massive government subsidy of this program?
Either the insurers are efficient, in which case they don't need subsidies - or they aren't, in which case the entire "government bad, insurers good" logic of the Republican's position falls apart.
September 26, 2009 6:30 PM | Reply | Permalink
. . . massive government subsidy . . . .
It may be "massive" and it may be a "subsidy" -- but who is being subsidized?
The CBO says that net payments to the Medicare Advantage Plans are 12% higher than fee-for-service payments, but --
Plan enrollees receive a goodly portion of those higher payments in the form of premium rebates and additional services. Ex. PFFS payments are 19% higher, but enrollees directly benefit to the tune of more than half (10%) of that higher payment. Peter R. Orszag, CBO Budget Committee Testimony 6/28/2007, p.4
Taking away seniors' Medicare Advantage subsidy may be like taking candy from a baby.
September 26, 2009 10:04 PM | Reply | Permalink
like taking candy from a baby
Did you read the same piece at I did? That rang a bell, reminded me of this:
from
Senator Tries to Allay Fears on Health Overhaul by Robert Pear, Sept. 23.
Honestly, if I was 70 and was getting dental and vision coverage in one of those plans, I'd be threatening my Congressperson, too. Why wouldn't I? It would be a shock to start having to switch to paying for that stuff out of pocket. Heck, it's tough for most under 65 to pay for that stuff, it''s not exactly standard coverage to include vision and dental and it ain't cheap.
Anyhoo, the article has some good input on the political situation regarding this, as well as some of the supposed threats of cuts.
September 27, 2009 12:22 AM | Reply | Permalink
Thanks for that article. This is what I blog about. Humana is big in Florida with very generous benefits in the Medicare Advantage plans.
September 27, 2009 12:35 AM | Reply | Permalink
I really appreciate you posting here, you clearly know your stuff, and I hope you take those who challenge you like you're some freeper or something with a grain of salt. With your knowledge, I trust you more to foresee political problems than a lot of other commenters here.
On the other hand, it's sort of been a learning experience for me finding out how many people commenting with activist fervor about "Medicare for all" don't seem to know much about actual Medicare at all, as if it is the equivalent of the Canadian system or something. Maybe it is like that for you, too. Seeing the lack of knowledge, it has helped me come to a more laid back position about incremental reform, I realize that whatever we end up getting, there will be a lot of bitching, few will be happy with it, and things will be changing for decades, no matter what happens. I think few would be happy with "Medicare for all" when they learned what it really meant :-)
Yeah, now the senior vote, they, on the other hand, the ones that vote regularly, in mid terms, they will be have more understanding of who is actually getting what in the first round. And it's a pretty sure thing that those Congresspersons will get credit for or punished for whatever happens by those very same, on this issue in particular. For that very reason, I'm betting a lot of what you are worrying about is probably going to be taken care of. It won't be pandering to the Medicare Advantage bigwigs, though, it will be pandering to their customers. That's what a lot of progressives don't get.
Somehow, somewhere, sometime in the future Medicare has to start moving away from the fee for service biz. That's really a big part of our problems. And isn't it a pain for many seniors to manage/juggle a Supplemental and a Drug plan anyways? The idea behind Advantage is where we have to start going, it's too bad that so many plans turned out so lousy and a rip off and politicians are in the position of making them the bogeyman, it makes the idea tainted as well, and we need it not to be if we are to reform the whole system.
September 27, 2009 1:37 AM | Reply | Permalink
Medicare alone, is not good coverage. For most services, Medicare pays 80% of the cost. You need a supplement to protect against getting clobbered by that 20%. This is where seniors go bankrupt, as paying 20% of chemo and radiation thereapy,plus lots of doctor visits, can be enormous.
A man called me recently from Bullhead City, AZ, which is way out in the middle of nowhere. He gets help with his Part B premium and his drug costs, but he's not on Medicaid because he lives on $1,100 per month. He only has Medicare and recently was taken to the hospital for some sort of liver problem. When he got out of the hospital he was presented with a very large bill for 20% of doctor fees and tests. He still needs tests and treatment but he has been told that if he can't pay his 20% upfront he can't get service.
He cannot get a Med Supp now with his health. If he enrolls in a Medicare Advantage plan his costs will be limited and even capped (depending on the plan. In his case, Medicare Advantage is a good choice and having only Medicare is a very bad choice.
Who designed Medicare with such large gaps? I have a feeling the gap was for the benefit of insurance companies so they would still be able to get a slice of the senior market.
September 27, 2009 1:56 PM | Reply | Permalink
Again, it's important for seniors and the public to be informed that Medicare Advantage, which involves a minority of seniors, is depriving traditional Medicare of resources it needs. The Advantage program does indeed offer marginal increases in benefits for some but not all subscribers, but these consume only a small fraction of the subsidies Medicare pays to the insurers. If Medicare subsidized its traditional program to the same extent, but without the waste and without the profits that characterize the private insurers, the "advantage" to the traditional subscribers could well exceed what Medicare Advantage subscribers get for their premiums.
September 26, 2009 7:12 PM | Reply | Permalink
If I were a Democratic Congressperson from Oregon (41.1% Medicare Advantage penetration) or Pennsylvania (36.4%) or California (34%) or any state where more than a quarter of Medicare enrollees have chosen Medicare Advantage plans, I'd be a little hesitant to take my potential voters' MA away from them.
Seniors do tend to come out on off-year elections.
September 26, 2009 8:45 PM | Reply | Permalink
Well, I see your point, but conversely, it might be advantageous for a Congressperson to emphasize the need to restore the balance between Medicare Advantage and Medicare if he or she comes from Alaska, Vermont, Delaware, Wyoming, New Hampshire, South Dakota, Maryland, North Dakota, DC, Mississippi, Illinois, Kansas, Maine, New Jersey, Nebraska, Arkansas, Iowa, South Carolina, Kentucky, Virginia, Georgia, Oklahoma, Indiana, Connecticut, Montana, Massachusetts, North Carolina, Texas, Missouri, West Virginia, Alabama, Tennessee, Louisiana, Washington, New Mexico, or Michigan.
One can only speculate on how this will play out politically. My speculation, and it's only that, is that the momentum to pass an overall reform bill will probably swamp any objection to individual Medicare Advantage changes in the minds of the majority of the electorate in the districts of most Democrats and some Republicans. Even so, I expect that we'll hear some statement from reform proponents about the need to trim Medicare Advantage of excess payments to insurers in order to preserve Medicare, as well as some tweaks in the bills to protect Advantage subscribers against more than minor benefit reductions.
September 26, 2009 9:52 PM | Reply | Permalink
I should add that the closer fight on a final bill may be in the Senate, where trimming Medicare Advantage will probably be a net plus for those likely to support Casey, Specter, Boxer, or Feinstein. It's unlikely that any of these Senators would balk at voting for the overall proposal that will probably emerge.
September 26, 2009 9:57 PM | Reply | Permalink
I should have substituted Wyden and Merkley for Boxer and Feinstein, but the point remains the same.
September 26, 2009 10:06 PM | Reply | Permalink
Get real!
Taking money out of a voter's pocket results in an upset voter.
Telling a voter that your plan to kill Medicare Advantage might (no guarantees) reduce his Part B monthly payment a bit some time in the future results in a big yawn.
September 26, 2009 10:13 PM | Reply | Permalink
Ellen - If you have something substantive to say, I will be glad to listen. Just being argumentative doesn't qualify.
I've already voiced an opinion that the Medicare Advantage issue is likely to prove quite minor in deciding the ultimate outcome. You may disagree, but neither you nor I can predict the future with enough certainty to justify the dogmatism with which you express your views. I would suggest that at this point, we let others decide what they want to conclude without belaboring the topic.
September 26, 2009 11:08 PM | Reply | Permalink
If you'd stopped at the point of disputing medicareblogger's claim that Medicare Advantage enrollees will see large premium hikes and reduced benefits in 2010 and thus, medicareblogger being wrong, politicians need not worry about a backlash, your umbrage might be understandable. But you didn't.
You claimed that politicians should be able to explain to seniors whose Medicare Advantage was being cut back that it would be all for the best (presumably, the seniors would agree) and anyway, affected seniors comprise only a minority.
Get real!
September 27, 2009 1:40 AM | Reply | Permalink
It's probably worth stepping back at this point for a broad view. With large, complex proposals, politicians typically perceive a need for tradeoffs in terms of which interest groups they must satisfy, and at what cost in terms of displeasing others.
In the case of healthcare reform, large constituencies have a stake in one or more of the following:
Providing coverage to tens of millions of uninsured and underinsured Americans.
Providing subsidies to make the insurance affordable for low income families.
Providing those subsidies without exorbitant tax increases, and without increasing the federal deficit.
Satisfying those constituencies requires finding as much revenue as possible from other sources. One attractive option, given the unpopularity of the insurance industry, is to reduce subsidies to private insurers in the Medical Advantage program. Despite Ellen's implication above, there would be no attempt to "kill" the program, but rather to reduce payments to the insurers. The Administration has judged this choice to be a wise tradeoff, for several reasons.
First, although no-one has suggested that it might not displease some Medical Advantage subscribers, most Medicare subscribers are in traditional Medicare, and the Administration is already pointing out that reducing subsidies to the Advantage insurers will make more resources available to Medicare - i.e., there would be a net benefit to seniors.
Second, and perhaps more important, the predicted losses to Advantage subscribers would be minimal in comparison with the saved federal dollars that could be spent elsewhere - on traditional Medicare, on subsidies for low income families, and as a means of minimizing tax increases.
The quantitation is important. Only a small fraction of the money paid to the Advantage insurers actually helps seniors; most is lost via overhead and profits. In fact, it has been estimated that every dollar the government gains by reducing Advantage insurer payments would reduce benefits to subscribers by only 14 cents - a valuable tradeoff indeed. For more details on this and other aspects of the Medicare Advantage issue, a good source is Maggie Mahar's blog. See
http://www.healthbeatblog.com/2009/09/more-on-proposed-cuts-to-medicare-advantage-seniors-would-save-far-more-than-they-lose.html and links therein.
It's understandable that the Advantage issue should loom large in the eyes of medicalblogger, because he is an insurance agent, but the Administration is viewing this through a broader perspective, which convinces them that they are embarked on a strategy that will win more support from critical constituencies than it might lose, particularly when the electorate attempts to judge the overall picture.
September 27, 2009 11:02 AM | Reply | Permalink
Yes, I am an insurance agent, but I'm also a Democrat. As I've written above, I am not defending Medicare Advantage. I'm just sayiing that when the government pays less money to insurance companies, insurance companies will pass those cut on to seniors in their Medicare Advantage plans. And those seniors (10.5 million) will see their Medicare change.
In Florida, 28% of seniors are in Medicare Advantage (919,000 voters). In California 34% of seniors are in these plans (1,547,000 voters). See http://kff.org Medicare Tracker.
Republicans will try to make the most of any changes to Medicare Advantage plans and, as usual, they will stop at nothing to scare voters into opposing change. I'm just saying that this will be very easy to do when it comes to Medicare Advantage.
From the NY Time article and Sen Nelson's ammendment it sounds like the Dems have finally noticed the fastball head for them.
September 27, 2009 11:57 AM | Reply | Permalink
I wasn't attacking you, medicareblogger, but rather pointing out that the proposed reduction in payments to Advantage insurers is a political cost that the Administration is weighing against the political benefit of gaining additional dollars to subsidize reform efforts, strengthen traditional Medicare, and avoid unnecessary tax increases, while maintaining budget neutrality. If in fact, a 14 cent reduction in benefits to Advantage subscribers results in a one dollar gain for other purposes, the Administration judges the tradeoff to be worth it. I'm sure they will try to minimize any displeasure on the part of Advantage subscribers, but I doubt they will refrain from attempts to trim the program.
For more details, I recommend the site I linked to in my previous comment. It is highly informative.
September 27, 2009 12:23 PM | Reply | Permalink