LevonP
11-24-2008, 08:55 AM
Insurers’ government-backed health plans for the elderly have increased taxpayer costs with no evidence of improved care, according to research backing President-elect Barack Obama’s call to lower U.S. subsidies.
Many of the Medicare Advantage plans, as they are called, don’t coordinate care to avoid duplication and ensure the best results, authors said in articles posted today on the Web site of Health Affairs. The plans were devised to offer more benefits than conventional Medicare paid directly by the U.S. government.
About a fourth of the 44 million people on Medicare are covered by the Advantage plans, with the U.S. expected to pay $100 billion this year for the coverage. Congress had increased payments in 2003, helping private insurers led by UnitedHealth Group Inc. and Humana Inc. Obama has called payments to insurers excessive and pledged to reduce funding by $15 billion annually.
“We spent a lot of money on expanding payments for Medicare Advantage plans, and it’s not clear what we got,” said Marsha Gold, a senior fellow at the firm Mathematica Policy Research in Washington and one of the authors, in a telephone interview. “There’s no real evidence that the quality of care is any better.”
Obama made health care a top domestic priority during his campaign for the presidency. Last week, Thomas A. Daschle, a former U.S. senator from South Dakota and an expert on health care, accepted Obama’s offer to become Health and Human Services secretary, a Democratic official familiar with the matter said. The health department oversees Medicare, the program for the elderly and disabled.
Goal Setting
Congress and the new president should set clear goals for Medicare, authors of a separate Health Affairs article said. That means facing down ideologues who want Medicare to wither and those who want it to be the foundation of the U.S. health- care system.
The Advantage plans cost, on average, 13 percent more than the government directly pays doctors and hospitals for patients who stay with the original Medicare program. The 10.2 million subscribers in Advantage make up 23 percent of all beneficiaries.
Depending on location, insurers offer extra benefits such as lower out-of-pocket costs, vision care and gym memberships.
The benefits are subsidized by taxpayers and beneficiaries who aren’t enrolled in Advantage plans. For 2009, Medicare estimates that Advantage costs boosted so-called Part B premiums for non-members by $3 a month, said authors Carlos Zarabozo and Scott Harrison in the journal. Both work for the Medicare Payment Advisory Commission, an independent congressional agency.
Insurance Burden
Insurers at the same time have grown more reliant on the government program as employers cut benefits and eliminate jobs in the recession.
Three companies -- Humana of Louisville, Kentucky; WellCare Health Plans Inc., of Tampa, Florida; and HealthSpring Inc. of Nashville -- depend on Medicare Advantage for more than 80 percent of their earnings before interest, taxes, depreciation and amortization, according to Carl McDonald, an analyst with Oppenheimer & Co. in New York, in a note to investors.
Advantage spending will hasten by 18 months the date when the Medicare Trust Fund will run out of money, which the government projects to be 2019, analysts said in Health Affairs.
Medicare spent $430 billion in 2007, or about 16 percent of the federal budget, to care for the 44 million beneficiaries. Spending, which made up 3.2 percent of the economy in 2007, is expected to grow faster than workers’ wages or gross domestic product, according to the annual Medicare trustees’ report released in March.
Call for Moderation
Analysts Robert A. Berenson, a senior fellow at the nonpartisan Urban Institute in Washington, and Bryan E. Dowd, a health policy professor at the University of Minnesota, said it was time for extremists on both sides of the issue to step aside.
“Allowing an inefficient Medicare program to sink into insolvency in hopes either that beneficiaries will force higher tax rates on their children or that the program will implode, forcing beneficiaries into the individual private insurance market, may be ideologically satisfying, but it is not responsible policy making,” they wrote.
Medicare officials should share information with researchers about the inner workings of the program, Gold said. President George W. Bush’s administration gave out little data, she said.
“It’s been tremendously hard to get information on what’s been happening with the program, and that’s meant that people have been flying blind,” she said.
Many of the Medicare Advantage plans, as they are called, don’t coordinate care to avoid duplication and ensure the best results, authors said in articles posted today on the Web site of Health Affairs. The plans were devised to offer more benefits than conventional Medicare paid directly by the U.S. government.
About a fourth of the 44 million people on Medicare are covered by the Advantage plans, with the U.S. expected to pay $100 billion this year for the coverage. Congress had increased payments in 2003, helping private insurers led by UnitedHealth Group Inc. and Humana Inc. Obama has called payments to insurers excessive and pledged to reduce funding by $15 billion annually.
“We spent a lot of money on expanding payments for Medicare Advantage plans, and it’s not clear what we got,” said Marsha Gold, a senior fellow at the firm Mathematica Policy Research in Washington and one of the authors, in a telephone interview. “There’s no real evidence that the quality of care is any better.”
Obama made health care a top domestic priority during his campaign for the presidency. Last week, Thomas A. Daschle, a former U.S. senator from South Dakota and an expert on health care, accepted Obama’s offer to become Health and Human Services secretary, a Democratic official familiar with the matter said. The health department oversees Medicare, the program for the elderly and disabled.
Goal Setting
Congress and the new president should set clear goals for Medicare, authors of a separate Health Affairs article said. That means facing down ideologues who want Medicare to wither and those who want it to be the foundation of the U.S. health- care system.
The Advantage plans cost, on average, 13 percent more than the government directly pays doctors and hospitals for patients who stay with the original Medicare program. The 10.2 million subscribers in Advantage make up 23 percent of all beneficiaries.
Depending on location, insurers offer extra benefits such as lower out-of-pocket costs, vision care and gym memberships.
The benefits are subsidized by taxpayers and beneficiaries who aren’t enrolled in Advantage plans. For 2009, Medicare estimates that Advantage costs boosted so-called Part B premiums for non-members by $3 a month, said authors Carlos Zarabozo and Scott Harrison in the journal. Both work for the Medicare Payment Advisory Commission, an independent congressional agency.
Insurance Burden
Insurers at the same time have grown more reliant on the government program as employers cut benefits and eliminate jobs in the recession.
Three companies -- Humana of Louisville, Kentucky; WellCare Health Plans Inc., of Tampa, Florida; and HealthSpring Inc. of Nashville -- depend on Medicare Advantage for more than 80 percent of their earnings before interest, taxes, depreciation and amortization, according to Carl McDonald, an analyst with Oppenheimer & Co. in New York, in a note to investors.
Advantage spending will hasten by 18 months the date when the Medicare Trust Fund will run out of money, which the government projects to be 2019, analysts said in Health Affairs.
Medicare spent $430 billion in 2007, or about 16 percent of the federal budget, to care for the 44 million beneficiaries. Spending, which made up 3.2 percent of the economy in 2007, is expected to grow faster than workers’ wages or gross domestic product, according to the annual Medicare trustees’ report released in March.
Call for Moderation
Analysts Robert A. Berenson, a senior fellow at the nonpartisan Urban Institute in Washington, and Bryan E. Dowd, a health policy professor at the University of Minnesota, said it was time for extremists on both sides of the issue to step aside.
“Allowing an inefficient Medicare program to sink into insolvency in hopes either that beneficiaries will force higher tax rates on their children or that the program will implode, forcing beneficiaries into the individual private insurance market, may be ideologically satisfying, but it is not responsible policy making,” they wrote.
Medicare officials should share information with researchers about the inner workings of the program, Gold said. President George W. Bush’s administration gave out little data, she said.
“It’s been tremendously hard to get information on what’s been happening with the program, and that’s meant that people have been flying blind,” she said.