Wednesday, October 14, 2009

Reality Check: The Health Insurance Lobby Deceives Seniors

Reality Check: The Health Insurance Lobby Deceives Seniors
Posted by Jesse Lee
This week AHIP (America's Health Insurance Plans), the lobby for the health insurance industry, released a report attacking reform so skewed and misleading that the firm they hired to produce it issued a statement distancing themselves from AHIP's presentation of it. Now, in a sign of desperation facing the fact that reform might actually give some power back to Americans and their doctors in making health care decisions, AHIP has gone a step further and embraced the same discredited deceptive tactics that opponents of reform have been using in attempts to scare our seniors.
Here's a point-by-point Reality Check on the new ad you might catch on TV from the health insurance lobby:

SCRIPT: Most people agree that we need to reform health care. But is it right to ask 10 million seniors on Medicare Advantage for more than their fair share?

REALITY: No Medicare Benefits Will Be Cut. Medicare Advantage is the part of the Medicare program that allows beneficiaries to receive services via private insurance plans. Private plans that participate in Medicare Advantage receive significant taxpayer subsidies from the federal government.
•Medicare Advantage Plans Overpaid by 14 percent on Average. Right now, Medicare pays those plans on average 14% more than they pay traditional Medicare. All Medicare recipients are subsidizing these private insurance plans, even though only a quarter of seniors are enrolled in them.
•Reducing Medicare Overpayments Strengthens the Medicare Program, Extends Solvency and Reduces Premiums. Reducing these Medicare overpayments will affirm President Obama's promise to strengthen the Medicare program, extend its solvency and reduce premiums for all beneficiaries.
•Medicare Advantage Overpayments Brings Medicare Closer to Bankruptcy. The Commonwealth Fund found that Medicare must pay $1,000 more per beneficiary in the Medicare Advantage program as opposed to Medicare. These overpayments bring Medicare closer to bankruptcy. The Center for Medicare and Medicaid Services estimates that Medicare Advantage overpayments will reduce the period of time the Medicare Trust Fund is solvent by 17 months.

SCRIPT: Congress is proposing over $100 billion in cuts to Medicare Advantage.

The non-partisan Congressional Budget Office says many seniors will see cuts in benefits [text: 50% reduction in extra benefits], and [state: CO,NM, MO, PA, LA, NV] is hit hard.

REALITY: CBO Said Most Beneficiaries Would Not be Affected. CBO has said that most beneficiaries currently enrolled in Medicare Advantage plans would not be affected.

•All Medicare Beneficiaries Pay for Extra Benefits that only a fraction of Medicare Beneficiaries Actually Receive. Extra benefits are such things as vision care, longer hospital stays and gym memberships and are not part of the regular Medicare benefits to which all beneficiaries are entitled. CBO said most beneficiaries currently enrolled in Medicare Advantage plans would not be affected.
•All Medicare beneficiaries subsidize those extra benefits in Medicare Advantage plans, even though only the people enrolled in those plans receive them. Medicare pays an average of $1236 more per year for people enrolled in Medicare Advantage plans than for those enrolled in traditional Medicare.
•The cost of Medicare Advantage adds to the premium price for ALL Medicare beneficiaries. Medicare Advantage subsidies will add $3.60 per month to premiums for all Medicare beneficiaries in 2010. This means that a typical older couple in traditional Medicare will pay almost $90 next year on average to subsidize private insurance companies who are not providing their health benefits.
REALITY: No Evidence that Extra Payments Lead to Better Quality. There is no evidence that this extra payment leads to better quality for Medicare beneficiaries.

•Insurers, not beneficiaries or the Medicare program, determine how these overpayments are used – and this includes marketing and other administrative costs. This means that seniors do not always get the full overpayments back in the form of extra benefits.
•Additionally, some plans offer lower cost-sharing for drugs and vision care but higher cost-sharing for services such as hospitalizations and home health services. As a result, seniors can end up spending more out of pocket under a Medicare Advantage plan, not less.
•One thing we cannot guarantee is that every private insurer that offers Medicare Advantage plans will continue to do so. Some pull out of the program because they don’t think their profits are high enough. That happened just this year.

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