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Medicare Advantage exposed as a giant ripoff [1]

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Date: 2024-07-02  

Was just now totally shocked by this article in FAIR (Fairness & Accuracy In Reporting), interview of David Himmelstein by Janine Jackson.

Excerpt:

The plans really trick the system in a couple of ways. One is that they seek out healthy, low-cost enrollees who are going to be inexpensive for them to cover. So they get the lump sum payment from the Medicare program, but the insurance company doesn’t actually need to pay for care. In fact, for 19% of Medicare enrollees, they cost nothing in the course of a year. So when an insurance company enrolls them, they get something like $10,000 or $12,000 a year, and they pay for no care at all. So that’s one thing—enroll healthy and inexpensive people and avoid sick ones.

The second is: make your benefits tailored to be unpleasant and unsustainable for people who are sick and expensive. So don’t approve rehab care, which Medicare traditional pays for, but the Medicare Advantage plans usually don’t. So if someone needs that rehab care, they’re really pushed to choose to go back to traditional Medicare.

And the third way is by inflating the amount Medicare pays them by making the people who enroll in the Medicare Advantage plans and those private plans look sicker on paper, and that increases how much Medicare pays, but in many cases doesn’t actually increase what it costs the plans to cover them. So they’ve leaned heavily on doctors to, say, add as many diagnoses as you can, even if they don’t cost anything, or don’t imply the need for more care. And, over the years, they’ve also taken to sending nurses into enrollees’ homes, not to help them out, but to try and discover additional diagnoses that could up the payment.

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