December 16, 2009, 9:25 am
Fewer Medicare Advantage Plans for Seniors
By MICHELLE ANDREWS
In the ongoing legislative tussle over how to trim the Medicare program to help pay for a health care overhaul, the Senate recently voted down an amendment by Senator Orrin G. Hatch, Republican of Utah, that would have blocked planned cuts to the subsidies that private insurers receive under the Medicare Advantage program. The extra money, 14 percent more per beneficiary on average than the government pays for seniors in traditional Medicare, has been targeted by the Democratic leadership and the White House as a giveaway to insurance companies that unfairly raises premiums for all Medicare beneficiaries.

Lawmakers who favor the private plans, however, say reducing the subsidies will result in painful cuts to the services seniors receive in the private plans, like vision and hearing screening and free gym memberships. Without the subsidies, they say, some private insurers may even pull out of the Medicare Advantage market.

But few lawmakers seem to realize that in some ways the horse has already left the barn: the Medicare Advantage program is shrinking already, thanks to new legal and regulatory changes. In 2010, there will be 18 percent fewer Medicare Advantage plans available to seniors than there were in 2009, according to an analysis by the Kaiser Family Foundation. Seven percent of the roughly 10 million beneficiaries who are enrolled in these plans will have to switch, according to the federal Centers for Medicare and Medicaid Services.

The biggest decline will be among Medicare Advantage private fee-for-service plans, whose numbers will decline by more than 40 percent when three insurers — Coventry, WellCare and Health Net — withdraw from the so-called P.F.F.S. market, according to Kaiser.

P.F.F.S. plans generally don’t have the defined provider networks associated with the better-established Medicare Advantage HMO and P.P.O. plans. The new plans have come under scrutiny for several reasons in recent years, including aggressive marketing tactics and the fact that some seniors have had difficulty finding providers who would accept their coverage.

These problems were an impetus for a 2008 law, the Medicare Improvements for Patients and Providers Act, that strengthened marketing protections for beneficiaries and required P.F.F.S. plans to have formal networks of providers in place starting in 2011. With the writing on the wall, some insurers decided to shut down their plans rather than invest resources in developing provider networks, experts say, and the shakeout may not be over.

“We’ll probably see lots of P.F.F.S. plans pull out in 2011,” said David Lipschutz, staff lawyer with California Health Advocates, a Medicare advocacy organization.

Other factors also are contributing to the reduced number of Medicare Advantage plans, including government efforts to eliminate plans that were very similar and to encourage
consolidation of those with fewer than 100 members.

Private Medicare health plans have been around since the 1970s as an alternative to traditional Medicare. They’re generally set up like managed care plans, with networks of providers and set co-payments for services, in contrast to traditional Medicare, in which patients see any participating provider and pay a percentage of the costs. Proponents thought that getting the private sector involved in Medicare would actually save the program money through increased efficiency and better coordination of care.

Over the past decade, Congress has encouraged participation in private sector plans by adding new types of plans and boosting the payments that plans received. Their efforts paid off: Just under a quarter of the 45 million people enrolled in Medicare today are in a private Medicare
Advantage plan.

The 2011 deadline for P.F.F.S. plans to develop provider networks is not the only pressure the plans face. In 2010, Medicare Advantage plan funding also was reduced by roughly 4 percent. Trade groups like America’s Health Insurance Plans warned that funding cuts would lead to reductions in the extra benefits that Medicare Advantage members typically receive. Other critics warned that the funding cutbacks would lead to a reduction in the number of Medicare Advantage plans that don’t charge a premium (apart from the regular Medicare Part B premium).

In 2010, there will indeed be fewer zero-premium plans. According to the Kaiser analysis, 43 percent of Medicare Advantage enrollees will be in plans without a premium next year, compared with 50 percent in 2009. And the 4 percent cut in plan payments is translating into $40 to $80 per member per month in reduced benefits or higher premiums, or a combination of the two, said John Gorman, chief executive of the Gorman Health Group, which provides consulting services to Medicare Advantage health plans.

So what happens if the subsidies are further reduced? Many experts note that even though some plans leave the market when their profit margins shrink, others have remained in the Medicare program for decades now. And although the number of plans has declined in 2010, enrollment has nearly doubled since 2004 and the number of plans has increased over that time, according to Tricia Neuman, director of the Medicare Policy Project at the Kaiser Family Foundation.

Further, though Medicare Advantage plans may drop some of the bells and whistles that they added when they were receiving bigger payments, the change may actually have an upside for beneficiaries. “The plans got fat and happy on these subsidies,” said Mr. Gorman. “What you’re seeing now is a renewed and urgent focus on medical cost management and care coordination.”

As for seniors, in 2010 the average Medicare beneficiary will still have a bewildering number of Medicare Advantage plans to choose from: 35 in urban areas and 24 in rural ones.
Deaths Rising for Lack of Insurance, Study Finds
Anthem Executive Blames Premium Increases on Rising Medical Costs
White House Urges Repeal of Insurers’ Antitrust Exemption
Anti-Abortion Group Opposes Increased Oversight of Premiums
Feinstein to Propose Federal Supervision of Insurance Rates
--------------------------------------------------------------------------------
Previous post

Lieberman vs. the ‘Public Option’ Patriarch Next post

A Read-Aloud in the Senate — Or Not
15 Readers' CommentsPost a Comment »All CommentsHighlightsReaders' RecommendationsRepliesOldestNewest
1. Leah
California
December 16th, 2009
9:43 amFirst the government took our money. Now, it refuses to pay. This is why the government can't be trusted with health care.

If a private insurer behaved this way, they would lose customers overnight. The government doesn't have to worry about losing customers.
Recommend Recommended by 2 Readers 2. Justin
Bloomington, In
December 16th, 2009
11:56 amI was a Medicaid Caseworker in Indiana when these plans started. Indiana had 40 plans the first year. They made such a profit that the next year there were 60 companies to chose from. The elderly were hounded by H..... to pay high monthly premiums when the Seniors could find a good play to cover their drugs for free. Unfortunately Seniors, who have no one to help them, ended up paying monthly premiums and not being covered for their most expensive meds. These Seniors need advocates to help them find the right plan for them.

My opinion is that the Market is so crowded due to the huge payout for the Companies. The companies can also drop any Senior's prescription, with 90 days notice, if they decide that the meds are too expensive to cover.
Recommend Recommended by 2 Readers 3. leah
colorado
December 16th, 2009
11:56 amRight, #1, the government took our money, set up a system to provide basic coverage for all seniors, then made the mistake of paying private companies to administer services it was already administering itself more efficiently. Now we have seen the error of our ways and are appropriately turning away from subsidizing private profits with dollars from seniors' premiums and workers' paychecks.
Recommend Recommended by 3 Readers 4. Plutonium
New York
December 16th, 2009
11:56 amI don't know what Leah from California is talking about. Why on earth should I, a tax payer, pay to support private health insurance plans? I'd like to understand why private plans are permitted to offer services like vision and hearing screening and free gym memberships at my expenses in more ways than one!

The latter steams me considerably as I have had serious back problems including major surgery this past year and I am limited in the physical therapy services for which medicare pays. Clearly I need to be on a lifelong program to strengthen my back, but medicare pays 0 for it. Would I give up the right to choose my own doctors for gym membership? As a two time cancer survivor, I shout a resounding NO!

And I am fed up with the likes Joe Lieberman (supposedly a God-fearing man! Ha Ha) who have completely forgotten that the purpose of government is to help people accomplish together what none could accomplish alone.

This country has gone to hell in a handbasket and for me the only saving grace is that as I am 74 (and remember what it was like before Ronald Reagan) I won't be around to witness the next civil war. There will be one, mark my words!
Recommend Recommended by 4 Readers 5. shaman
usa
December 16th, 2009
11:56 amI am so angry at the politicans for screwing up what was already a screwed up system and finding ways to drive the costs up and reduce the options and quality. please stop these guys - kill both bills - and find some rational folks who will not be paid off by big pharma and insurance companies and start again. this is the most corrupt sick misbegotten hoax i think i've ever seen.
Recommend Recommended by 4 Readers 6. Chicklet
Douglaston, NY
December 16th, 2009
11:56 amMedicare Advantage plans, which require the patient to pay extra for extra services not available in 'traditional' medicare are attractive to patients who need the services. Patients take direct responsibility for their care when they understand what is and is not covered and plan accordingly.
Once enrolled in a Medicare Advantage plan, most seniors are happy with the value of what they've purchased. Annual tinkering with the law that governs what benefits may be offered, what the fees are, etc. are too much for many insurers, who would rather leave the market than revamp their offerings every single year. Re-printing, publishing, filing for approval, sending mailings, every time the plans requirements change creates a problem, this money should be going to patient care.

It all fits in with the unstated goal, single payer with no consumer choice (well, maybe you can choose the fine or tax you'll pay if you disagree with what mother tells you to do) followed by taxes, bureaucracy and exploding costs. We all know the government has a terrible track record with the government programs they now administer, Medicaid, the VA, Medicare are not exactly paragons of value, and have next-to-no fraud and abuse safeguards.

I hope Senator Lieberman holds on to his principles and citizens continue to speak their minds, a 25 pound bill that moves 1/5 of the economy from private to government control, passed in a big hurry by a congress with no medical expertise is not a good idea to me.
Recommend Recommended by 4 Readers 7. mm
here
December 16th, 2009
2:11 pmIt's a clear example of the inefficiencies of add-on insurance to a single-payer market. A single person now has two entities to deal with - Medicare and add-on. If this were a free, competitive market, you could choose a single plan of your choice of coverage levels.

Those who moan about admin overhead, you now have it in two companies for a single person. Very inefficient.

A single policy through a single provider and the networks would already be in place, you would not have the problem of the add-on trying to negotiate for provider support.

Coverage is tied to budgets and politics - never a good thing. Reading through the article all one sees are regulation, policies, etc. getting in the way of care.

The need in the first place is because Medicare, due to budgets, politics and simply because it was a poor implementation in the first place, could not adapt their coverage to fit the needs of they people.

This article is a mini-case study for why single-payer is NOT a good idea and why tying health insurance to politics and budgets is NOT a good idea. Expand this to all of the US - we should all shudder at the thought, the cost, the quality.
Recommend Recommended by 2 Readers 8. Leah
California
December 16th, 2009
2:11 pmleah from Colorado - You are unhappy with the way the government managed your Medicare money. I am also unhappy but for different reasons.

We have a win-win situation here. How about we don't start yet another government entitlement program? You get to spend your money the way you want. I get to spend my money the way I want.
Recommend Recommended by 2 Readers 9. E. Nowak
Chicago, IL
December 16th, 2009
2:11 pm"The extra money, 14 percent more per beneficiary on average than the government pays for seniors in traditional Medicare, has been targeted by the Democratic leadership and the White House as a giveaway to insurance companies that unfairly raises premiums for all Medicare beneficiaries."

-------------------------------------------

How ironic. The health care bill the Democrats are trying to shove down our throats is one GIANT Medicare Advantage plan!

I agree with Howard Dean. Kill this bill and vote in liberal Democrats in the next election.

Better yet, start a third party that's devoted to campaign finance reform!


Recommend Recommended by 3 Readers 10. John Chik
OC, CA
December 16th, 2009
2:11 pmI have belonged to Kaiser Permanente (KP) senior advantage for several years and receive excellent coverage. KP is non-profit and has an excellent reputation for medical quality and cost control, 93% of every dollar goes directly to medical care with only 7% going to administration. If congress reduces Advantage payments by $1700 per year, my premiums will go up by $1700 per year. Just what a retired guy needs. Thank you Mr. O.
Recommend Recommended by 3 Readers 11. thomas
lima
December 16th, 2009
3:52 pmMost Soc.Sec.beneficiaries get by on very modest incomes.The Med.Advantage gym membership benefit gives them the means to focus on and follow healthy lifestyle practices at little or no cost to the beneficiary and for Medicare a modest cost that produces,in all probability significant reductions in Med.Advantage expenses.Need I say more?
Recommend Recommended by 3 Readers 12. mm
here
December 16th, 2009
3:52 pm"How ironic. The health care bill the Democrats are trying to shove down our throats is one GIANT Medicare Advantage plan!

I agree with Howard Dean. Kill this bill and vote in liberal Democrats in the next election."

No, the Single Payer you advocate is EXACTLY this scenario described above. You'd have a base set of coverages that would be insufficient. Folks would need to supplement that coverage with add-ons. The add-ons would not be effcient due to duplicity in adming and poor economies of scale. The original plan and any subsides would be fought over politcally and via budget every year. The original plan would not be flexible enough to adapt.

Again, this highlights exactly why many of us don't want ANYTHING to do with single payer. Or government control of healthcare.
Recommend Recommended by 2 Readers 13. mn
az
December 16th, 2009
5:47 pmMother in law was in regular Medicare, Mom has been in Advantage plans for many years - both over 80...clearly regular Medicare is much better so Mom just switched to regular Medicare for 2010. Advantage plan doctors were not cooperative about medication side-effects and she was not able to switch to another doctor easily (it took months), nursing home care relatively poor from Advantage vs better facility available via normal Medicare, and access to physical therapy took many appeals in Advantage plan but quality physical therapy care was easily provided in regular Medicare. These Advantage plans are not worth the extra money paid to them.
Recommend Recommended by 1 Readers 14. flamingcreature
nyc
December 16th, 2009
5:47 pmmedicare a was one of dubya's many parting gifts to private industry. it costs more than medicare. #10, you think you were only paying $1700 a year when in fact everyone, including yourself, was and is paying more in taxes to cover what medA enrollees are not paying up front, because the administration wanted to give as much money to private industry at taxpayer expense. it was never about helping you. it was - i repeat - a gift to private industry.
Recommend Recommended by 1 Readers 15. juanita
meriden,ct
December 17th, 2009
10:13 amMedicare Advantage plans are just another big giveaway to insurance companies.
Seniors were tricked into signing up for them without realizing that those plans had far more restrictions on them than regular Medicare. And as happened in the Northeast, when the insurance companies did not make enough profits on certain plans, they just dropped them mid-year and let the seniors scramble to get back on regular Medicare, or find another plan. There were a lot of panicked seniors because of that.
Why on earth should our taxpayer dollars go to insurance companies to manage a federal program, when it COSTS THE TAXPAYER MORE for funding Medicare Advantage plans than for funding regular Medicare? !!!!!
Recommend Recommended by 0 Readers


Pelosi Faces Two HurdlesCompromise health care legislation faces a tough road in the House.
February 26
(11)
New Developments in the Health Care DebateProminent economists call for Congress to overhaul health care, and other news related to the health care debate from Times bloggers.
February 26
(54)
Deaths Rising for Lack of Insurance, Study FindsIn the absence of comprehensive health care legislation, a lack of insurance will contribute to 275,000 deaths over the next decade, an advocacy group warned on Thursday.
February 26
(15)
The Morning AfterThe Times ponders Thursday's health care forum.
February 25
(8)
Video: The Health Care Session in 4 MinutesHit rewind to see some of the top moments from President Obama's health care session at Blair House.
Where Things Stand Now
Check this space for the latest updates from Washington and beyond.
White House | Democrats and Republicans aired their differences over proposed health care legislation at a bipartisan health care summit hosted by President Obama on Feb. 25. In light of Republican opposition, Democrats weighing budget reconciliation.

Senate | Republican Scott Brown won Kennedy's Senate seat on Jan. 19. Passed health care legislation, 60 to 39, on Dec. 24.



Wary Centrists Posing Challenge in Health Care Vote
By SHERYL GAY STOLBERG and ROBERT PEAR
The future of President Obama’s overhaul rests largely with two blocs of swing Democrats: abortion opponents and fiscal conservatives.
Democrats to Press Health Bill With Simple Majority
By ROBERT PEAR
Seeing no prospect of bipartisan agreement on health care, Congressional Democrats said that they would make another effort to pass sweeping health care legislation on their own.
The Cost of Doing Nothing on Health Care
By REED ABELSON
In health care, there will be no status quo, with or without an overhaul. Prices will rise beyond reach. Then what happens?
Uniting Democrats Is Challenge at Health Forum
By DAVID M. HERSZENHORN
The president did not seem to win over any Republicans, and seemed to end the day largely where he started, with little choice but to rally his Democrats to act on their own.
Parties Jousting With Dire Warnings
By ALESSANDRA STANLEY
Narrative choices designed to frighten were at the heart of the marathon health care summit meeting on Thursday.
Featured Posts
The Legislation
The Public Option

The public may have more appetite for the public option than many in Congress do.


Comparing Health Plans
Would Tort Reform Lower Costs?
The Abortion Question
The Problem With Prevention
Co-ops and Exchanges
Explaining the Exchange

Understanding the principle, and the politics, of the “insurance exchange.”

The Fine Print
What’s a Health Insurance Co-op?
Who Will Care for the Newly Insured?
Health Care Abroad
Taiwan
Taiwan implemented a Canadian-style single-payer system in less than a year.

Germany
Switzerland
France
Japan
Canada
Paying for Care
Insured, but Bankrupted Anyway
Medical bills are a major cause of personal bankruptcies in the United States, and proposed legislation isn’t likely to change that.

CaucusDebateEconomixBossNew Old Age A Tip on Slavery, Holocaust Talk
Comparisons to the Holocaust or slavery draw fire from left and right.
Blogging the Health Care Summit
President Obama, along with leading Democrats and Republicans, are meeting for a six-hour summit to try to hammer out some details of health care legislation.
Video: Health Summit Preview
A look at President Obama's style so far in negotiations.
Republican Senators: We'll Be There
The lineup is beginning to shape up for those who will attend Thursday's health care summit.
Congress Returns to Confront Jobs Bill
The Senate is expected to take up a scaled-back employment bill, but the Democratic majority needs a few Republicans to get on board.

Can Obama Bypass Republicans on Health?
The political risks of pushing through health care legislation without the G.O.P.
Did Obama Move Health Care Forward?
Will the president's words affect the political stalemate?
The G.O.P.'s Next Move on Health Care
What should the Republicans do now that they have the ability to change the game?
Medicare for 50-Somethings?
A Democratic plan to cover people 55 to 64 -- a group hard hit by layoffs.
Squeezing Money Out of Home Health Care
Does cutting Medicare spending on home health aides make good financial sense?

Once More, Health Care Cost Control
Many of Republicans' preferred ideas for controlling health care costs would have, at best, marginal influence, an economist writes.
What Is 'Affordable' Health Care?
President Obama needs to clarify the terms of the health care debate at his meeting with members of Congress, an economist writes.
If Colleges Worked Like Health Care
Just imagine what universities would be like if they sold education piecemeal the way the health care industry sells health care, an economist writes.
No Such Thing as 'Simple' Health Reform
Congress can do it "simply," or do it right, an economist writes.
What We're Reading...
Check-lists for finance, and other links from around the Web.

What Obama's New Health Care Plan Means for Small Businesses
What's unclear at the moment is whether this proposal reflects the views of Democratic leaders in Congress - that is, whether this is a bill the White House hopes can pass, or thinks can pass.
Your Business and Health Insurance Costs
How much have your business's health insurance rates gone up?
Entrepreneurs, Carefully Chosen, React to Obama's Speech
Even those who sat next to Michelle Obama have some questions.
Modernizing Government: An Entrepreneurial Perspective
President Obama calls business owners for tech support.
On Health Care, Readers Speak; The Agenda Responds
Please keep those cards and letters coming.

Home for Thanksgiving, and Managing Meds
A new brochure helps family members home for holiday visits talk to their parents about their multiple medications.
Easing Tensions in the Nursing Home
Conflicts between family members and nursing home staff may be familiar, but they are not inevitable, researchers say.
The Nursing Home as Battle Zone
Are conflicts with nursing home staff inevitable?
In Health Debate, the Oldest Voices Are Also the Faintest
The elderly are concerned about proposed changes to the health care system. But what of those patients who are most exposed to it?
When the Hospital Says 'So Long'
Tips on handling hospital discharges.
Multimedia
Comparing the House and the Senate Health Care Proposals

A look at how the proposals compare on some key issues.
A History of Health Care Reform

For almost a century, presidents and members of Congress have tried and failed to provide universal health benefits to Americans.
Impact of Health Care Measures

New new health care measures will affect certain types of households.

Uncovered: Coping With, and Without, Insurance

Covered by an inadequate plan, denied insurance or voluntarily without insurance – six men and women share their experiences.
Recommended Reads
Talking Points Memo
Not Budging: After Summit, Pelosi Says Health Care Is In Senate's CourtTime
On Health Care Who Goes First: House or Senate?The Wall Street Journal
Partisan Divides Continue to Cloud SummitThe Hastings Center
The (Unfortunate) Economic Logic of Technological ProgressCenter for American Progress
Interactive Map: Health Reform Will Lead to Job CreationHealth Affairs
Health Care Summit: The ConclusionReuters
California health insurers subpoenaed in rate probeFiveThirtyEight
A Few Final Thoughts on the Ublicpay OptionwayHealth Care Navigator
A list of topical resources selected by researchers and editors of The New York Times.
Draft Legislation
Senate Bill: Affordable Health Choices Act – Committee on Health, Education, Labor, and Pensions
Senate HELP Committee Press Release on the Affordable Health Choices Act – Senate HELP Commitee
Preliminary Analysis of the Provisions of Title I of the Bill – Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT)
House Bill: America’s Affordable Health Choices Act – Committee on Education and Labor
Summary of House Bill – Committee on Education and Labor
General Information
Health Funds Allocated by the American Recovery and Reinvestment Act – U.S. Dept of Health and Human Services
Budget (FY 2010) of the Dept of Health and Human Services – Office of Management and Budget
Fact Sheet: U.S. Health Care Spending – Centers for Medicare & Medicaid Services
U.S. Health Care Spending Highlights – Centers for Medicare & Medicaid Services
National Health Expenditures, 1960-2007 – Centers for Medicare & Medicaid Services
Advocacy Groups
The Stimulus Bill: What Does It Do for Health Care? – FamiliesUSA
Health Care Quality – National Coalition on Health Care
The Pillars of Health Care Reform – Conservatives for Patients’ Rights
Four Common Sense Reform Principles – Better Health Care Together
Health Care Reform Proposals – America’s Health Insurance Plans
The Fallacy of Health Care Reform as Economic Stimulus – The Heritage Foundation, Jan 16, 2009
Wrong on Health Care – Cato Institute (Michael Tanner), Feb 26, 2009
Three Roadblocks on the Road to Health Reform – American Enterprise Institute, Jan 8, 2009
Blogs
The Health Care Blog
Health Affairs
Health Care Policy and Marketplace Review
Health Beat
Video
Health Care Reform at Core of New Budget Plan – The NewsHour with Jim Lehrer, Feb 26, 2009
National Health Policy Conference – Academy Health, Feb 2, 2009
A Discussion about Healthcare with Ezekiel, Ari, and Rahm Emanuel – Charlie Rose, June 16, 2008
Other Coverage
The Market Can Fix the Healthcare Problem – U.S. News & World Report (Newt Gingrich), Jan 27, 2009
How Should Obama Reform Health Care? – The New Yorker, Jan 26, 2009
Subscribe
Prescriptions RSS

Educator to the world
Also in Jobs »

A midstream switch to teaching
Looking for a new job?

Topics
IN ANOTHER COUNTRY
IN PRACTICE
IN THE TIMES
MEDIA
Q & A
THE DIALOGUE
THE DIVIDE
THE MONEY
THE POLITICS
UNCATEGORIZED
WE, THE PATIENTS
Ads by Google what's this?

Affordable Health Plans
Get Affordable Health Insurance Online - Plans from $30 / Month!
Affordable-Health-Insurance.org


HomeWorld U.S. N.Y. / Region Business Technology Science Health Sports Opinion Arts Style Travel Jobs Real Estate Autos Back to Top
Copyright 2010 The New York Times CompanyPrivacy Terms of Service Search Corrections RSS First Look Help Contact Us Work for Us Advertise Site Map

Medicare and the Elderly

President Obama hopes to finance a health care overhaul in part by squeezing hundreds of billions of dollars in savings from Medicare through a crackdown on fraud and waste. An oft-cited example: Medicare Advantage, run by private insurers reimbursed by Medicare, costs the government 14 percent more per enrollee than traditional Medicare.

Republicans claim that Democrats will ultimately be forced to reduce Medicare benefits to seniors in order to finance health care for more citizens. Are the elderly being asked to shoulder the burden for universal coverage? Should Medicare, or something like it, be available to an even greater number of Americans?