Local Opinion: Privatizing Medicare is the wrong way to go

The insurance plans known as “Medicare Advantage” are incorrectly named. They are not Medicare and they may offer little or no advantage. They are a form of private insurance, cost Medicare a lot of money, and in some situations can indeed hurt you.

Medicare was created in 1965 to provide universal health coverage to senior and disabled people through government-funding, not private insurance. The most insidious and effective threat to it is from programs such as Medicare Advantage and REACH that use money intended to provide health care to instead guarantee profit for private insurers.

In fact, Medicare Advantage (MA) participants are taken out of Medicare and enrolled in a private managed care program. The companies running them receive not only the money that would have gone to traditional Medicare but additional funds. They spend a great deal of money on lobbying Congress and on political contributions, and make billions in profit, in a number of ways.

Traditional Medicare allows virtually free choice of any doctor or hospital (since few do not participate in the Medicare program), but MA plans limit access to a specific “panel” of doctors and hospitals. If you seek care from an “out-of-network” provider you may have to pay lot of money. MA plans greatly prefer healthy seniors to those who are sick (and costly), attracting them with perks like some vision and hearing care that cost them little but can be useful if one is generally healthy. When they have been found to fraudulently overbill Medicare for billions of dollars, they simply pay the fines as a cost of doing business.

The goal of these programs is not to provide health coverage, it is to generate profit. MA plans make money, as demonstrated by the amount that they spend on aggressive marketing, by mail and on television. The Commonwealth Fund describes this in detail: “Soaring private plan enrollment has led to a sharp increase in marketing and sales efforts, some misleading and inaccurate.” MA plans can keep 15% of the money they get for profit and overhead, spending only 85% on paying for care.

Medicare Advantage is not the only way Medicare is being privatized. In 2020, the Medicare Innovation Center (CMMI) implemented the DCE program, renamed ACO-REACH in January. This “innovation” encourages the creation of investor-owned companies that contract with primary care practices (usually owned by corporations). All of those doctors’ patients automatically, without their choice or knowledge, become members of the ACO/REACH group that gets the money that Medicare would have paid for them. Even the doctors may not know that they are in it. Patients can only get out if they are able and willing to switch their primary care physician to one who is not in a REACH program, if they can find one, which is particularly difficult in rural or urban underserved areas. REACH allows the private company to keep even more than Medicare Advantage, at least 25% of its take as profit and overhead, spending only 75% or less on patient care.

Privatizing Medicare is absolutely the wrong way to go. The right way to go is to keep the structure of traditional Medicare, where anyone can use any doctor or hospital, where there is no profit taken out, and overhead is about 2%. Then increase its benefits so that it covers 100% (not 80%) of charges so people don’t have to buy a Medicare Supplement Plan, as well as cover dental, vision, hearing, etc. This is affordable, as it can be funded by the money that now generates huge profits for private investors but could be used to actually improve our healthcare.

While we still need to address access in terms of geography and specialty distribution, eliminating the profit motive will make major steps toward access and improved quality, and move us toward health care for all.