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By Trudy Lieberman, Health Care un-covered, April 30, 2024

Sometimes a health policy story comes along that should be shouted from the rafters — well at least reported by media that cover the subject. Brett Arends’ story for Dow Jones’ MarketWatch is one of those stories. 

In “Medicare Advantage is overbilling Medicare by 22%,” Arends introduces readers to a government agency that in its latest report exposed Medicare Advantage plans to light. The revelations about overpayments come from the Medicare Payment Advisory Commission, MedPAC for short, some of whose recommendations over the years have resulted in high rate increases for Advantage plan sellers that helped make it possible for them to offer groceries, bits of dental care, and other goodies seniors have snapped up. The media’s role in revealing and dissecting those overpayments is long overdue.

The last several months news outlets have been paying more attention to the downsides of Medicare Advantage plans. Arends’ story focused on one thread in the story: MedPAC’s latest report to Congress that revealed something health policy wonks — but not the public — have known for a long time. Medicare Advantage plans are taking advantage of the federal gravy train.

“The private insurers who now run more than half of all Medicare plans are overcharging the taxpayers by a staggering $83 billion a year,” Arends wrote. “They are charging us taxpayers 22% more than it would cost us to provide the same health insurance to seniors directly if we just cut out the private insurance companies as middlemen.”

a rip-off, pure and simple

MedPAC was set up by the Balanced Budget Act of 1997, “back when people in Washington were actually doing their jobs,” Arends points out. The commission’s job is to advise Congress on issues involving Medicare. MedPAC reports discuss the financial situation of the Medicare trust funds, and over the years those reports often revealed that the private health plans have been overpaid. Until recently, there has been little to no pushback from the government or most of the media, in effect leaving the insurance industry a clear path to sell Medicare Advantage plans to more than half of the Medicare market. The media have recently begun to ask why. 

Arends calls the Medicare Advantage arrangement “a rip-off, pure and simple,” noting that what sellers of the plan are paid “is more than twice as much as it would cost simply to provide free dental, hearing and vision care to all traditional Medicare beneficiaries, not just those in private ‘Medicare Advantage’ plans.”

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We must have healthcare from birth to death with no premiums, no copays, no deductibles, no out of pockets which covers all basic and necessary medical care including hospital, doctor, pharmaceutical, dental, vision, hearing, mental health, reproductive care, and long-term care.

It is time to move forward together with Universal Healthcare. Americans are well past ready, we just need the Administration and Congress onboard.

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HealthCare For All WNC is an Asheville, NC, group organizing for fundamental health care reform. We advocate for a single-payer national health program – improved Medicare for All – that would provide universal coverage, comprehensive benefits, and zero cost sharing.

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