069 The Erickson Report for January 26 to February 8, Page Three: Turning Medicare into a corporate piggy bank

I'm going to talk briefly about two programs relating to Medicare, one of which you likely have heard of and one which you may well have not unless it affected you directly.

The first is Medicare Advantage. If you are older, that is, of Medicare age, you may even be on one of these programs. Approaching half of us are. I am, in fact. For me, personally, it seemed the best option I had. And if you're a senior in overall good health, as I am, it may well be for you too.

But it's a scam, a cheat, a rip-off - not necessarily of anyone in the program, but of the taxpayers, of the people as a whole.

Who says so? Among others, Wendell Potter, former vice president for corporate communications at insurance giant Cigna and someone who helped design the PR campaign that convinced Congress to go along with the scheme.

He now says: "Medicare Advantage is a money-making scam. I should know. I helped to sell it."

The first thing to know here is that Medicare Advantage is not Medicare. It is a separate corporate health insurance industry program established under Medicare Part C. And it stands, bluntly, as a step on the road to a total privatization, that is, the destruction, of Medicare.

Here's how Medicare Advantage works: Insurance corporations, unlike real Medicare, don't deal on a person-by-person, procedure-by-procedure basis. Instead, every year, Advantage providers submit a summary to the federal government of the aggregate risk score of all their customers and, essentially, are paid in a massive lump sum based on that figure.

This is all done under the notion that being private capitalist corporations, they'd be more efficient that any government agency could be, and so the whole programs would save taxpayers money. It doesn't, as repeated audits have shown.

Instead it has become an enormous cash cow for insurers, in large part because of the way they have rigged the risk-scoring system to maximize profits.

Your risk score is a measure of how much the company thinks you will cost in benefit payouts. Simply put, the sicker you are, the higher the score. And the higher your score, the bigger the payout to the company from the government. Which creates a clear incentive for the corporations to inflate their risk scores.

Consider how this could happen in my case. Again, I am in overall good health. But I'm getting older, I'm in my 70s, and as folks get older some issues can arise just in the course of ageing.

For example, I've developed a tremor in my left hand. It's something that sometimes happens to older folks. It's an annoyance, especially because I'm left-handed. It can make it difficult to type and I sometimes have trouble when I try to write things down and yes I do still write in cursive sometimes. It's an annoyance.

The point here is that I had a neurological exam and it was negative. It's what's called an essential tremor; it just is. There is no neurological involvement.

But in my medical records, under diagnoses, it says "hand tremor," not "essential hand tremor." An insurance company could look at that and despite the exam say "Ooh, so there is still a risk of neurological involvement. Raise his risk score."

I've had surgery on both shoulders due to osteoarthritis. Even though there has been no other issue before or since, nothing that has required any medical intervention, still the corporation could say "He's got a history, there could be more in the future. Up his score."

I've had in some past some digestive issues. Again, this is a matter of annoyances, not something that impacted my day-to-day life. But under diagnoses, it says Irritable Bowel Syndrome. "Oh my," says the insurance company, "that's serious. Higher score."

The point being that you can take someone in overall pretty good health and make them seem much sicker, with a higher score, depending on how you want to interpret the record.

Which is exactly what has been happening.
 
The Centers for Medicare and Medicaid Services (CMS) estimated that “net overpayments to Medicare Advantage plans by unconfirmed medical diagnoses" came to $11.4 billion in fiscal year 2022 alone.

And on top of all that, the program is designed such that once you're on it, you're pretty much stuck. There are significant financial obstacles to switching to real Medicare, making it as a practical matter almost impossible for a lot of people. Which means that over time the portion of Medicare-age people on these so-called Advantage programs grows and the fear is that once that figure is over 50%, which it almost is, that will be used to justify shutting down real Medicare, leaving these programs the only option.

The whole thing is, as Thom Hartmann called it, a Trojan horse to privatize Medicare. The entire program should be shut down - now.

Oh, and if you're on traditional, that is, real, Medicare? You are still being thrown into the clutches of grasping insurance companies.

Which is that other program I mentioned, the one you might night know about. It was set up under Tweetie-pie under the name Direct Contracting Entities as what amounts to a for-profit corporation acting as a benefits manager contracted by Medicare to sit between you and the health care provider. That is, instead of Medicare in that space, dealing with claims in and benefit payments out, there is a private corporation contracted to do that.

These DCEs are paid monthly by the CMS to cover a specified portion of a patient's medical care instead of Medicare dealing with reimbursing providers directly. The issue is, these companies are paid that contracted amount and anything they don't spend on care they keep as profit.

Which clearly gives these corporations an incentive to skimp on Medicare patients, including finding ways to deny claims or only approving the cheapest treatment methods even if a more expensive one is called for.

This began as pilot program and was deliberately designed with the idea of being another step to privatizing Medicare and another way to rip off the public even as it was being sold with the traditional mantra "private enterprise efficiency."

Virtually any company can apply to be a DCE, including investor-backed startups - that is, even with no prior experience in insurance, health care, or medicine - along with other Wall Street types and insurance corporations already doing Medicare Advantage programs.

And if you're on Medicare, you can be assigned to one of these profit-hungry outfits without your approval or even knowledge.

Okay, but that was under Tweetie-pie, right? We have a Democrat in there now, so it's okay, right?

Dream on.

Not only is the Blahden Administration continuing the program, the CMS announced in January a significant expansion of the pilot program with the goal of making it universal - of having everyone on Medicare assigned to one of these outfits - by 2030.

About the only thing Blahden did was re-brand the program as, get this, ACO REACH - Accountable Care Organization Realizing Equity, Access, and Community Health. Because turning over administration of our health insurance claims to private corporations whose goal is, never forget, maximizing profit, increases accountability - somehow.

Bear in mind that the $650 million in Medicare Advantage overcharges discovered by federal audit back in 2013 and 2014 still have not been recovered from the corporations that claimed them.

Medicare and Social Security overall are about the most popular, most successful federal programs in US history and the right-wing and reactionaries hate them for precisely that reason and have been trying to shut them down from day one. We cannot let them succeed.

One last thing on this, a question all this raises: If we as a people, through our taxes, can in these programs pay - as is happening - for Medicare and Medicaid plus corporate profit plus the cost of illegal overcharges, how in hell can anyone continue to claim we could not afford a national health care plan?

I intend next time to look at the renewed attacks on Social Security, including the calls for a new version of a cat food commission.