Don’t Trust Insurance Industry “News” about Medicare Advantage
Deb Gordon’s piece in Forbes entitled, 88% Of Medicare Advantage Enrollees Are Happy With Their Health Insurance, New Study Shows, is more like an industry press release than a bona fide news story. The problem begins with the headline, which leads readers to believe that 88% of all enrollees are happy with their Medicare Advantage (MA) plans, according to a new study. In fact, the “new study” on which the entire story is based was conducted by an insurance company called E-Health, which sells Medicare Advantage plans!
Unlike other surveys cited by journalists, this one was not conducted scientifically using a random sample of the general MA population whose attitudes it purports to analyze. It’s quite the opposite in this case. “The findings presented in this report are based on a voluntary survey of Medicare beneficiaries enrolled in Medicare Advantage plans purchased through eHealth’s website,” says E-Health.
In other words, the 88% figure is not truly representative of all Medicare Advantage enrollees and certainly not of all Medicare beneficiaries as a whole. It merely means that 88% of the company’s own customers who volunteered to answer the survey responded that they were happy with their MA plans. That is a bit like your employer asking you if you are happy with your job.
Customers who hold negative feelings about their insurance plan are unlikely to volunteer to answer a survey from their insurer. The enrollees with positive feedback for the company are much more likely to share their feelings in a survey, like the 88% who are “happy with their plans.” Ditto for the 86% who told E-Health that they would recommend Medicare Advantage to a friend or family member and the 61% who said they preferred MA over traditional Medicare.
This gets to another problem with the survey and Gordon’s coverage of it. The phrasing of the questions is not exactly neutral. As the Gallup organization points out, “differences in question wording on a specific topic can make a difference in how people respond.” It’s not hard to see how some of the e-Health survey’s questions would lead the respondent to answer the way the company wants:
“In your opinion, is Medicare Advantage a good example of cooperation between government and private enterprise?”
“How satisfied are you with your Medicare Advantage plan?”
“Would you recommend Medicare Advantage to family or friends?”
These might be okay for an internal customer satisfaction survey, but not for a survey that is going to be the basis for a piece of journalism. Why does this matter? Because the public already is subjected to millions of dollars of advertising and propaganda from the Medicare Advantage industry – including those famous tv ads featuring celebrities like Joe Namath and Jimmy Walker. By contrast, traditional Medicare does not run marketing ads and, during the Trump administration, was under-emphasized in government enrollment materials vs. Medicare Advantage.
Naturally, the industry’s advertising and propaganda machine does not include the disadvantages of Medicare Advantage – which can be substantial. Medicare Advantage offers HMO-like plans with limited networks of providers, giving enrollees fewer options for care. They may not even be able to see their favorite physician or specialist without paying for it themselves. And MA plans’ marketing materials do not always disclose crucial details that might affect access to care or coverage limits.
In fact, the HHS Inspector General’s office issued a report in April, showing that some MA plans are denying “medically necessary” claims and pre-authorizations that should be covered under Medicare rules. The motive seems to be reducing outlays at the expense of patient care.
Medicare Advantage plans were created in 2003, allowing private insurers to compete with the traditional, federally-run Medicare program, under the assumption that the plans could provide the same if not better level of care more cost-effectively. Quite the opposite has happened. Investigators have caught some MA plans overbilling the government by billions of dollars:
According to MedPAC, a government watchdog panel, the federal government incurred $12 billion in “excess payments” to Medicare Advantage plans in 2020. MedPAC projected the figure will swell to $16 billion next year. – Entitled to Know, 6/10/22
Meanwhile, federal investigators are probing allegations that some MA plans are billing the Medicare program for patient care based on “outdated or irrelevant” diagnoses, in order to make more money. 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.”
The Forbes article briefly touches upon some of these allegations, but in the end brushes them off. “There’s always room for improvement,” writes Deb Gordon, as if allegations of fraud and wrongful denials of patient claims were minor inconveniences. She then quotes a high-ranking executive of e-Health:
“It’s important to listen to the consumer and understand what works and what doesn’t. As shown in our report, for the strong majority, affordability and convenience trump other considerations.” – Bob Rees, e-Health Vice President of Medicare Sales
The combined effect of the misleading headline, the understatement of serious allegations against MA plans, and the presentation of the survey as anything but propaganda, amounts to a whitewashing of the Medicare Advantage program at a time when it is coming under growing – and appropriate – scrutiny. Older Americans considering their best options for Medicare coverage should take a hard look at the facts, and question industry propaganda posing as journalism.
Medicare Advantage Plans Are Under Increasing Scrutiny
Medicare Advantage (MA) plans – the privatized alternative to traditional Medicare – are coming under growing scrutiny for a number of questionable practices that undermine patient care and overcharge taxpayers. This week, 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 that some MA plans are billing the Medicare program for patient care based on “outdated or irrelevant” diagnoses, in order to make more money. These include conditions like heart disease, depression, obesity, and cancer that patients had already surmounted — or that they never had in the first place. Critics say that in addition to overcharging the government for care for these patients, 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 that 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.
According to MedPAC, a government watchdog panel, the federal government incurred $12 billion in “excess payments” to Medicare Advantage plans in 2020. MedPAC projected the figure will swell to $16 billion next year.
Meanwhile, the HHS Inspector General’s office issued a report in April, showing that 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, which up to now has been dominated by traditional Medicare. This is thanks, in so small part, to 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, of course, do not mention that MA plans offer limited networks of providers – or that medically necessary claims and pre-approvals may be denied so the plans can make more money. Nor do Joe Namath and Jimmy Walker tell viewers that some plans are over-billing the government for false or outdated diagnoses, and without patients’ knowledge.
Instead of being held truly accountable, Medicare Advantage plans are being rewarded with an 8.5% revenue increase from the federal government for 2023. Since this privatized version of Medicare was created, for-profit companies have gained increasing influence in the care of one of our most vulnerable populations – the elderly. It is welcome news that 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.
Social Security Trust Fund Projected to Endure for an Additional Year, Trustees Say
Social Security’s trust fund received a one-year reprieve in the 2022 Social Security Trustees report, released late Thursday afternoon. The Trustees project that the combined disability and retirement trust fund will become depleted in 2035 – one year later than predicted last time – if Congress doesn’t take preventative action. When the trust fund becomes insolvent, the Trustees say, Social Security will only be able to pay 80% of scheduled benefits. That would mean a massive benefit cut for everyone who collects Social Security.
While the National Committee to Preserve Social Security and Medicare is relieved that the trust fund is projected to remain solvent for one additional year absent any action by lawmakers, President and CEO Max Richtman said in a press statement that Congress must act now to protect the program:
“While the trust fund insolvency date may fluctuate from year to year, the urgent need to boost the program’s financing and benefits remains consistent. The clock is running down. The time for fair, just, and equitable action that safeguards Social Security’s financial stability is now.” – Max Richtman, NCPSSM President and CEO
The National Committee supports legislation introduced in the House by Rep. John Larson (D-CT) that would put Social Security on a path to financial stability, Social Security 2100: A Sacred Trust. It would also boost benefits for everyone on Social Security and adopt a more accurate COLA formula to help seniors better cope with inflation. To pay for these improvements, the bill would require those earning over $400,000 a year in wages to contribute their fair share through an adjustment in the payroll wage cap.
Larson’s bill has more than 200 cosponsors in the House, but not a single Republican has stepped up to support Social Security 2100. In past years, the GOP has called for raising the retirement age, privatization, and more recently, ‘sunsetting’ Social Security and other vital programs every five years.
President Biden, who during the campaign called Social Security and Medicare “sacred obligations” to the American people, rejected the Republican approach:
“Led by (National Republican Senatorial Committee) Chair, Rick Scott, their plan would put (Social Security and Medicare) on the chopping block every five years. That’s not the way to strengthen these programs. I will work with anyone willing to have an open and honest conversation about… strengthening the programs that millions of Americans rely on.” – President Biden, 6/2/22
NCPSSM President Max Richtman says that the public supports boosting, not cutting, Social Security. “Poll after poll shows that, across party lines, the American people want the kind of improvements in Rep. Larson’s bill, not harmful benefit cuts.”
In their report yesterday, The Trustees themselves urged prompt, pro-active action by Congress to strengthen Social Security’s finances:
“Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits. Social Security (plays) a critical role in the lives of 66 million beneficiaries and 182 million covered workers and their families… With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations.” – 2022 OASDI Trustees Report, 6/2/22
According to the Washington Post, the Trustees based their new projections, in part, “on a stronger and faster economic recovery” than predicted in 2021 during the midst of the pandemic. Meanwhile, the New York Times reported that “for now, (the Trustees) are also assuming that the pandemic will not affect the long-term solvency of Social Security.”
The Trustees also reported, as they do every year, on the financial outlook for Medicare’s Part A trust fund. That forecast improved this year, with the shortfall date for the Part A trust fund projected to occur in 2028 – two years later than predicted in last year’s report. According to the Reuters, “That change is due mostly to the improved economic forecast, since the program is funded through payroll taxes.”
Social Security Trustees Project Trust Fund Depletion in 2035
National Committee President and CEO Max Richtman issued the following statement today in response to the just-released report from the Social Security Trustees:::
“The takeaway from the latest Social Security Trustees report is this: Congress must strengthen the program’s finances without delay. The Trustees project that the combined Social Security retirement and disability trust fund will become depleted by 2035, one year later than projected in their previous report. At that point, every Social Security beneficiary will suffer a 20% cut to their benefits. While the trust fund insolvency date may fluctuate from year to year, the urgent need to boost the program’s financing and benefits remains consistent. Rep. John Larson’s Social Security 2100: A Sacred Trust legislation would extend trust fund solvency by requiring high wage earners to contribute their fair share through an adjustment in the payroll wage cap. The bill has more than 200 Democratic cosponsors in the House, but not one Republican has stepped forward to endorse Social Security 2100. Over the years, we have heard the GOP call for raising the retirement age, privatization, and more recently, ‘sunsetting’ Social Security and other vital programs every five years. But poll after poll shows that, across party lines, the American people want the kind of improvements in Rep. Larson’s bill, not harmful benefit cuts. Seniors struggling to meet rising living expenses need Social Security to be boosted and strengthened. The pandemic, runaway inflation and devastating stock market losses serve to remind us how vital a robust Social Security program is to workers, retirees, the disabled and their families. The clock is running down. The time for fair, just, and equitable action that safeguards Social Security’s financial stability is now.” – Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare
All House Dems Should Cosponsor Social Security 2100 Bill
If you are represented by a Democrat in the U.S. House, chances are that your member of Congress has already cosponsored a piece of landmark legislation to boost and strengthen Social Security: Rep. John Larson’s Social Security 2100: A Sacred Trust. In fact, the bill currently has 202 Democratic cosponsors (and zero Republicans). But some Democrats have not signed on as cosponsors, even though improving Social Security benefits and extending the solvency of the trust fund are priorities that Democrats should agree on. The more Democratic co-sponsorships the bill garners, the stronger the case that House leadership should bring it to the floor for a vote.
Rep. Larson, chair of the House Ways and Means Social Security subcommittee, introduced a new version of the bill in October, 2021. Among other things, Social Security 2100 would provide an across-the-board benefit increase for all beneficiaries. It would also boost benefits for particularly vulnerable groups – including widows, widowers, and the ‘oldest of the old’ seniors. The bill also includes a new COLA formula that better reflects seniors’ spending priorities.
“The pandemic has only underscored what we already knew and has exacerbated systemic inequities — current benefits are not enough! 5 million seniors are living in poverty due to longstanding workplace discrimination affecting mostly people of color and women. For too long, Congress has forsaken its duty to enhance benefits. With 10,000 Baby Boomers a day becoming eligible, and with Millennials needing Social Security more than any generation, the time for Congress to act is now.” – Rep. John Larson, 10/26/21
Social Security 2100 covers the costs of expanding benefits by adjusting the payroll wage cap so that higher earners contribute their fair share. This would only impact those earning more than $400,000 per year in wages – or less than 2% of working Americans.
In addition to the 202 House cosponsors, Social Security 2100 has been endorsed by over 100 advocacy groups, including the National Committee to Preserve Social Security and Medicare. Among the members who have not yet stepped forward as cosponsors, the National Committee hopes that Reps. Cynthia Axne (D-IA), Rep. Susie Lee (D-NV), and Rep. Tom O’Halleran (D-AZ) will do so now. Each of these House members are Social Security champions who earned 100% ratings on the National Committee’s most recent legislative scorecard.
Some of these Democrats may be worried that if they cosponsor the bill, Republicans will run attack ads accusing them of raising taxes. But President Biden won the White House promising not to increase taxes on anyone earning less than $400,000 a year, and the Sacred Trust bill conforms with that pledge. Many high earners who would be affected by the bill have told pollsters they don’t mind paying their fair share. And the group Patriotic Millionaires has long advocated adjusting the payroll wage cap.
The measures in Rep. Larson’s bill have overwhelming public support. A poll by Lake Research Partners showed that across party lines, 79% supported paying for an increase in benefits by having wealthy Americans pay the same rate into Social Security as everyone else. A recent survey of our members and supporters indicated 96 percent support for raising the cap. Survey respondents were unequivocal in their comments:
“Eliminate the wage cap! It’s common sense.”
“Make them pay their fair share!”
“The wealthy should pay Social Security taxes on everything they earn – just like we do.”
“There should not be a cap at all!”
Rep. Larson’s bill is awaiting mark-up by the full House Ways and Means committee, which is expected to happen in June. Lawmakers are also waiting for the Congressional Budget Office (CBO) to score the legislation, which is required for Social Security 2100 to be brought to the House floor for a vote.
Rep. Larson’s bill is truly historic. Social Security benefits have not been increased in more than fifty years. Retirees, people with disabilities, and their families need a benefit boost and a better COLA formula to meet ever-rising costs. They need the certainty that Social Security’s trust fund will remain solvent past the projected depletion date of 2034. The Republican response to Social Security’s challenges is to raise the retirement age (or enact other benefit cuts) and privatize the program — or as the chairman of the party’s Senatorial campaign committee proposed, to sunset all federal programs (including Social Security and Medicare) after five years.
Social Security 2100: A Sacred Trust presents an opportunity for Democrats to continue building on the foundation that President Franklin D. Roosevelt built when the program was created in 1935. Eighty-six years later, the program is at a crossroads. For the sake of all Americans who rely on Social Security, Rep. Larson’s bill is something that all House Democrats can – and should – get behind.