“Finally, Some Accountability for Medicare Advantage Ads”
This was sent to me by Dale Coberly. I was wondering why Dale was sending me trash advertisements.
Skimmed it and then it dawned on me. Much of this advertising is made to sway people’s minds to do something. It is the type of advertising I sometimes wish to throw a shoe at the 65-inch screen when it should be shown on a 12 -inch screen.
It is especially aggravating, when the advertising includes the famous, the rich, the good-looking, etc. This is one example of a pitch using an aging athlete. If Joe, etc., says this is good, it must be good. It is not! It also blurs the boundaries between Traditional Medicare and Commercial Medicare called Medicare Advantage. Much of this fluff about Medicare Advantage is made up as you will discover as you read the NCPSSM blog piece.
This commentary first appeared on the “National Committee to Preserve Social Security and Medicare” blog.
The makers of these misleading ads for Medicare Advantage (MA) star celebrities like Joe Namath, Jimmy Walker, and William Shatner pitch may finally be held to account. The Centers for Medicare and Medicaid Services (CMS) has issued new rules clamping down on the ads after receiving a flood of consumer complaints. As Mark Miller writes in yesterday’s Retirement Revised blog,
“Brokers will be subject to tougher disclose rules. Most significantly, Medicare will hold insurers responsible for what their marketing agents say in ads.”
The celebrity-driven ads blur the line between privately-run Medicare Advantage (Medicare Part C) and Traditional, Medicare, a publicly-administered Medicare program. Joe Namath and company make it sound as though “Medicare Part C” is the Medicare program. It is definitely not. Viewers may never know there is a public option called “Traditional Medicare,” solely focused on patient care rather than private profit. The ads also contain misleading invitations urging consumers to call the Medicare Advantage plan’s toll free-number and find out how to “add money back into your Social Security check.”
Earlier this week, the Wall Street Journal reported:
“The aggressive sales efforts by marketers are the result of billions invested by private-equity firms, financial-services companies and stock-market investors into virtual call centers, internet-based lead-origination firms and other marketing businesses over the past several years.” – Wall Street Journal, 8/31/22
The government’s new rules are aimed at marketers selling MA policies for insurance companies. Insurers will be held accountable for what marketers claim in the ads. The bottom line: MA marketers “will need to disclose more to their customers,” according to the Journal. The new rules are not aimed at the celebrities who appear in the ads, but William Shatner of Star Trek fame promised,
“We’ll change things so it satisfies everybody and eliminates the confusion.”
Medicare Advantage plans have come under growing scrutiny for a number of questionable practices such as undermining patient care and overcharging taxpayers. Last June, the Washington Post reported about a whistle-blower from a Medicare Advantage outfit in California who is working with federal investigators looking at alleged, widespread malfeasance on the part of MA plans. According to the Post:
“The Justice Department is pursuing civil lawsuits against multiple companies that participate in the privatized system, from huge insurers to prestigious nonprofit hospital systems, alleging they have cheated the system for unfair profit.” – Washington Post, 6/5/22
Investigators are probing allegations about some MA plans billing the Medicare program for patient care. Overbilling based on “outdated or irrelevant” diagnoses, in order to increase profits. The diagnoses include conditions like heart disease, depression, obesity, and cancer. Conditions patients had already surmounted or never had in the first place. In addition to overcharging the government for care for these patients, critics claim MA plans billing for outdated or false diagnoses could stigmatize patients “who were improperly deemed obese, malnourished or mentally ill.”
“The point of larding the medical records with outdated and irrelevant diagnoses such as cancer and stroke — often without the knowledge of the patients themselves — was not providing better care, according to a lawsuit from the Justice Department; (it was to make higher profits).” – Washington Post, 6/5/22
Some Medicare Advantage plans have long been accused of “upcoding,” which means “submitting bills for more severe and expensive diagnoses or procedures than (were) diagnosed or performed,” according to the National Center for Biotechnology Information. Plain and simple, this is a form of fraud. The victim is the Medicare program — and the workers, taxpayers, and enrollees who fund it.
The irony is Medicare Advantage plans, which began during the George W. Bush administration, were supposed to save the Medicare program money. Instead, these privately-run, for-profit plans are “costing taxpayers more money to run than traditional fee-for-service Medicare,” notes the Washington Post.
(AB) If Medicare Advantage can not compete with fee for service traditional, MA will experience difficulties competing against Single Payer.
According to the government watchdog MedPAC, the federal government incurred $12 billion in “excess payments” to Medicare Advantage plans in 2020. MedPAC projects the figure will swell to $16 billion next year.
Meanwhile, the HHS Inspector General’s office issued a report in April, showing how some MA plans are denying “medically necessary” claims and pre-authorizations that should be covered under Medicare rules. Again, the motive seems to be squeezing more money out of the federal government at the expense of patient care.
“The Inspector General’s report explains that because the Centers for Medicare and Medicaid Services (CMS) pays Medicare Advantage plans a flat fee regardless of the amount they spend on care, they have a ‘potential incentive … to deny beneficiary access to services and deny payments to providers in an attempt to increase profits.’” – Common Dreams, 6/8/22
Despite the mounting evidence of wrongdoing on the part of some MA plans, Medicare Advantage continues to grow in popularity. MA is on the brink of capturing more than half of the Medicare market. Up till now the market has been dominated by traditional Medicare. This is the result of the torrent of television ads featuring celebrity pitchmen promising lower premiums and free benefits like gym memberships and rides to the doctor’s office.
The ads fail to mention MA plans:
- Offer limited networks of providers, or
- Medically necessary claims and pre-approvals may be denied so the plans can make more money.
Neither Joe Namath or Jimmy Walker tell viewers about plans over-billing for false or outdated diagnoses. This occurs unbeknownst to patients.
Instead of being held accountable, Medicare Advantage plans are being rewarded with an 8.5% revenue increase for 2023. Since privatized Medicare Advantage plans were created, for-profit companies have been gaining influence in the care of the elderly. It is welcome news, the Justice Department and HHS Inspector General’s office are intensifying their scrutiny of Medicare Advantage. At stake is nothing less than billions in taxpayer dollars and the wellbeing of millions of America’s seniors.
“MA Plans are Scamming Billions from Medicare – Angry Bear” (angrybearblog.com)
in case it’s not clear, i sent Run the NCPSSM piece because it said what he has been saying here for a long time. I thought getting it from another source would help people understand it, and understand that it is real.
“skimming it” here shows me why this is so hard.
in brief: Medicare Advantage is a scam. It provides worse coverage to people at greater cost to the government. Shows what happens when we privatize essential services that people voted for because sometimes the government does things better than private enterprise.
This report does not show something else that I believe is part, if not the root, of the problem: Medicare designed to work the way Social Security works: insurance for workers paid for by the workers….began to fail when well meaning people decided to “make the rich pay their fair share.”
If workers paid the full cost of Medicare (“the rich” pay approximately half the cost) it would raise the workers “tax” about three percent…but save them more than that on “private” insurance like Medicare Advantage. People need to understand this. No sign that they do, or will even make the effort to.
It has not hit 50% as of yet and may go down a couple of percent. The issue here is the cost of healthcare. While the Government Traditional Medicare is Fee For Service and is less expensive than Commercial Medicare Advantage, Fee for Service is not efficient in costing and still depends on coding. I have a cholesterol problem according to Cardiologists. Yet yy Cholesterol is 105 today and for the last several years the same or close. 2015 I was at 160, not great but still below what is considered bad.
Forty years ago, I was at 205 which was acceptable then. They asked me to lower it by 20% and sent me to a dietician who said I could not lower it by 20%. I did plus some. Since 40 years ago, the 160 was a high. When I had open heart, my cholesterol was 104. HDL and LDL and Tris were fine. Yet I am still coded as having a cholesterol problem.
Both, over code, except MA care says they can do it better than traditional Medicare. And we are paying more for subsidized MA which vastly over codes as compared to traditional Medicare.
I am not a proponent of FFS and Medicare Advantage is worse than Fee for Service.
I got my 50% a few years ago from SSA numbers. are you counting in the fact that there is no cap on payroll taxes for Medicare?
I’d have to lookat the whole thing all over again to be sure, but I don’t think that part D is legitimate as long as there are no price controls, and part B should be paid by payroll taxes over a life time and not by premiums taken out of your SS…which is stupid. the whole point of insurance is to even out the payments over a lifetime so you are not staggered by having to pay a higher risk rate when you are old and have less income.
I added the link for you. The pie chart on the left says 46% comes from General Revenue.
Amen. Now if we could just make people understand that.
it would be hard for me to tease out anything useful from the figures and numbers as presented here.
my first guess is that the seven tenths of one percent of payroll that it would take to make HI “solvent” is quite similar in principle to the 4% of payrolll that will ultimately be required to make OASDI solvent. Both amounts can quite easily be met gradually by raising the payroll tax appropriately. At some point the total payroll tax can look scary-large if one looks at it without understanding that it takes a fair amount of money to live after you can no longer work and you are going to have to pay for it anyway,,, either straightforward by payroll tax, or hidden from yourself by taxing the rich, counting on “savings” or “investments”, or your fairy godmother government which of course is morally obligated to take care of you at no cost to yourself (this last is bitter sarcasm, for those who don’t recognize it.) Paying for it yourself straightforwardly is the best option… it gives you ownership of your own money (so you can say you paid for it yourself). Health care is similar but old age is certain, expensive medical care is not certain… which is why it is called “insurance” “just in case.” regular SS is also insurance..but the insured event there is “arriving at old age without enough “savings.”
this may all sound perfectly obvious, but you’d be surprised how many people don’t understand it. refuse to understand it.
i haven’r calculated how much it would cost to have Part B paid for out of payroll taxes, but at a quick guess.. if a hundred a month will cover it after you are retired, about fifty a month ought to cover it if spread over forty years of working before you retire.
I am thinking like 1/2 half of 1% increase per year for a few years and get control of costs.
sounds about right to me. get control of costs. get control of congress.
what is apparent to me is that Americcan democracy is in fact owned by the big money interests. Factor that in and you explain just about everything.
Now the funny thing about that is that i am not a communist, don’t evenconsider myself a socialist. But I’d would love to see a democracy…where half the people were not crtifiably crazy…and the people were allowed to make collective arrangements that would shelter them from the inevitable creative detruction of capitalism.
Seems to me that if a bunch of people can form a corporation. another bunch of people should be able to form a “corporation” to supply labor at a fair price, or a corporation to provide medical insurance at a fair price, or to save for their retirement protected from the ills that money is heir to.
Maybe you dbl it to 2.9 for people and 2.9 for employers, It is not much but it would probably fill the gap and eliminate general revenue. If you do LTC, you could probably cover that with another 1%.
The big deal is controlling commercial healthcare costs.
Just guesses for now.
I haven’t wanted to get into Medicare because THE problem there is costs twice as high as in the civilized world.
From the 2021 Report it looks like the Medicare tax could be raised about three tenths of a percent immediately, then 3 hundredths of apercent each year until 2030, one tenth of a percent each year until 2040. Hold there until 2050, and decrease the tax after that. or another way to put it..raise the tax to about 5% . Expect it to go down after 2050.
This doesn’t look very different from you guess. But there is no need to tax the employer (unless wages remain unreasonably low) and there are moving parts I haven’t looked at yet..
But the Big Problem is COSTS which have something to do with our Congress being bought and paid for by the Health-Industrial complex.
The employer already pays 1/2 of the amount for their employees. If both contributions cover 54% of the costs leaving 46% to General Revenues; it is easy to determine an almost doubling over a couple of years would cover the shortfall. Better to move quickly on the increases. 1/2 of 1% for 4 years is hardly noticeable.
like i said, i have not been looking at Medicare, but a table in 2021 report i looked at this morning seemed to show no employer contribution.
am i wrong?
Yes. employer and employee Medicare Contribution Rate “The current tax rate for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total.”
Also: ” An employer is required to begin withholding Additional Medicare Tax in the pay period in which it pays wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year.”
Otherwise, Medicare has no wage based limit.
yes, i was wrong. the chart says “emplyees only” but apparently that refers only to the extra for high incomes. this requires careful examination of the line at the top of the table entries. that is a thin horizontal line, and not the printed line.
which means that employee cost is 1.45% now (i think) combined cost is 2.9%.. and (i guess) the 5% that will be needed in future is divided (by 2) to get an emplyee cost of 2.5%.
seems like it should be doable if anyone really wanted to stop the death of the Trust Fund scare stories.
The precedent for deceitful advertising was established with the creation of Medicare Part D, in my opinion. Advertisers would flood potential clients with mail that did not have to explain anything about pricing, tier structure, or the ability of the plan provider to require “step” prescribing or to change formulary and/or prices during the coverage year. Nor were the advertisers required to tell the potential consumer that free information and plan comparisons were available to them through their state insurance offices.
Studies have been done showing that Medicare Part D costs consumers over $300 annually in excess cost, simply because the presentation of costs and risks is so confusing. And many people simply keep on with the plan they initially purchase rather than shopping every year
MA is much worse than Part D, in my opinion. But isn’t it interesting that corporate medicine has been so successful at pretending to provide individualized care? Perhaps the stupidity and selfishness of many of our aging politicians, who do not have to deal with the systems they so happily put in place in the name of “choice” and cost control has something to do with this.
Good Morning Deb
I would have thought deceitful advertising might have come about the time of the Lemon Laws for automobiles and other consumer products. Although with new houses, I am beginning to think it should apply there also. With that issue, the house may be mostly sound, it is the builder who throws up walls. The present builder desired a questionnaire be filled out sayng how wonderful they were. They wanted only fives and tens as ratings.
I just got here, only one square of the sidewalk was available which translated into the movers having a three-foot wide atra connecting to the driveway to get our belongings into the house. The Construction Manager calls me three weeks later to tell me, he signed the authorization to have the other three squares poured. I think he believed I would get angry. I didn’t. Roughly, there were twenty issues with the house.
One issue was the slant of the driveway to the right as you look at the house. Rather than pour a short sidewalk after they poured the driveway, they did the opposite creating a very noticeable slope from the sidewalk to the right side of the driveway. I am the son of a bricklayer – tuckpointer. My dad never finished grade school. While some may have fathers who taught them economics, I learned my father’s trade, how to rig scaffolds, splice rope, tie knots, etc. To make matters worse for this construction manager, I learned how to frame houses, draw plans, etc. while in high school.
He got on the topic of what the builder would do. I answered back of being a “reasonable man” who would expect a product to be supplied in a reasonable condition. Or what would a reasonable man or woman expect?
The driveway was fixed along with 13 other items by mid-January (from early November). There are 7 more items to be tackled of which 5 are completed. Each time, I have had to remind them that they have to provide me with a product that lacks issues. If it was bad from the beginning, I do not know what it should be like and your comments of maintenance being done fall flat as I was not given a product which was in the condition it should be from the beginning. So yes, you must correct it. All within a reasonable amount of time from the 1 year provided by the Builder to correct such issues.
My rating of them will be done at the one-year mark with a lengthy letter attached. If I wish to be an ass, I might send it to the Board of Directors. This Construction Manager thinks he is cute. I am patient and I save my emails, copying myself.
To your point. what would a reasonable man or woman expect to find when surveying Part D plans for Medicare? They look at price. Prices which are established by intermediaries such as PBM, with drug stores, distribution (McKesson, etc.) and manufacturers. They establish the Tiers and whether they can have generics or fall back on the patented drug. You could look at the costs of each of your drugs and match it to what each plan offers. It does involve looking at each plans pharma array. Most people are not as intelligent as you are. They rely on what works for them and their doctors who can sell them out.
I think the better question to ask is if the price of the drug is reasonable. Humira and Rituxan were two of the highest priced drugs (WHO Technical Paper). Humira is still up there, Rituxan has decreased as an older drug. It has been discovered Rituxan can be used for other things so the price has been jacked up.
How would a person on the street know all of this? They can’t. So they stay pat based upon their past experience. Insurance companies are not the most truthful either. Every once and a while, I have the need for Rituxan. Total cost including infusion is ~$28,000 and Medicare pays ~$8,000. I can not negotiate this stuff or find a different plan which may do better.
It is the industry who knows the true costs and established prices. So Medicare is going to negotiate prices. If you do not know established costs, how do you set a price? There seems to be an intermingling of the words cost and price. .
This is too long, Thank you for your response to an important topic.
the precedent for deceitful advertising is at least as old as the Republic. America was founded by snake oil salesmen. The whole thing was put on a scientific basis by 1950 or so. I don’t know if Vance Packard’s “Hidden Persuaders” has been banned from the libraries yet, but it explained how it works way back then.