DEAR EDITOR:

Medicare Advantage, also known as MA or Medicare Part C, is a privately administered insurance program using a capitated payment structure, rather than fee-for-service (FFS) structure of Traditional Medicare (TM). Instead of paying directly for health care of beneficiaries, the federal government gives a lump sum to a third party (generally commercial insurers) to “manage” patient care.

Although private insurers have been involved in one form or another since Medicareás early days, it is only since Medicare Advantage’s establishment in Medicare Modernization Act of 2003 that such participation grew significantly. Since 2007, the share of beneficiaries enrolled in MA nearly tripled; the program now manages care of more than half of eligible beneficiaries.

Managed care proponents maintain programs like MA reduce expenditures, improve care quality and enable consumer choice. The reality is the opposite. Data show privatized Medicare has never yielded savings for the program; conservative estimates by Medicare Payment Advisory Commission (MedPAC), an independent agency advising Congress on Medicare, shows payments to MA plans for two decades always were higher than they would have been for patients in Traditional Medicare. Despite this additional spending, MedPAC could not say conclusively whether care outcomes fared better under MA. While patients in Traditional Medicare have access to nearly all medical providers nationwide, those in MA must contend with heavily limited networks and arcane prior authorization procedures, calling into question which choices consumers can make.

These are serious issues, but this letter deals chiefly with overcharging in Medicare Advantage. Various elements of MA result in higher government spending than necessary for Medicare benefits, with much going toward corporate profits. Instead of creating a more efficient care system, large corporations use MA as cash cows, taking billions in taxpayer dollars while delaying or denying treatment.

Through complicated methods such as favorable selection (enrolling those with less expensive needs), targeted advertising to reach patients most favorable to their profit margins, and upcoding (adding diagnoses that are false or irrelevant to treatment), MA seeks to bilk government and taxpayers out of billions of dollars every year.

All told, the percentage of excess payments in MA accounting amounted to anywhere from 31% to 35%, or $124 billion to $140 billion in 2022.

Medicare Advantage is just another example of endless greed of the insurance industry, poisoning American health care, siphoning money from vulnerable patients while delaying and denying necessary and often life-saving treatment. While there is obvious reason to fix these issues in MA and expand Traditional Medicare for the sake of all beneficiaries, deep structural problems with our health care system will be fixed only when we achieve improved Medicare for All.

PAT RUSSO

Warren