Over the past several months, the insurance industry has been running a massive advertising campaign to scare seniors into believing the Biden administration is cutting Medicare. Republicans in Congress are echoing these claims to protect insurance company profits. In reality, the Biden administration is proposing to increase spending on Medicare Advantage by approximately $4 billion while protecting the program from overpayments, fraud, and abuse by big insurance companies. Recent coverage makes clear that health insurance companies are working overtime to “exaggerate the stakes” in order to protect their massive profits at the expense of seniors.
Read Protect Our Care’s fact sheet about how big insurers are spreading falsehoods about Medicare Advantage here.
HEADLINES
STAT: Wary Of Changes To Medicare Advantage, Health Insurers Put Up A Fight — And Exaggerate The Stakes. “For the past two months, the health insurance industry has attempted to scare older adults and the public into thinking the federal government is slashing Medicare benefits next year… Since any changes to Medicare are politically unpopular, health insurers are hoping the pressure will force the Biden administration to retreat from its February proposals that would specifically change how Medicare Advantage plans are paid. Final regulations are due to come out April 3. But insurance companies, as well as some doctors’ groups, are distorting the reality of the proposals in an effort to protect the sizable and growing profits they earn from Medicare Advantage. If anything, the government’s proposals are relatively tame, according to researchers and experts who have no ties to the industry. And they say officials could do more to combat the most egregious coding practices, which increase costs.” [STAT, 3/27/23]
The New York Times: Biden Plan To Cut Billions In Medicare Fraud Ignites Lobbying Frenzy. “The change in payment formulas is an effort, Biden administration officials say, to tackle widespread abuses and fraud in the increasingly popular private program… Without reforms, taxpayers will spend about $25 billion next year in “excess” payments to the private plans, according to the Medicare Payment Advisory Commission, a nonpartisan research group that advises Congress. The proposed changes have unleashed an extensive and noisy opposition front, with lobbyists and insurance executives flooding Capitol Hill to engage in their fiercest fight in years.” [The New York Times, 3/22/23]
Axios: The Quiet Privatization Of Government Health Insurance Programs. “The insurers that administer Medicare benefits and their allies are running an enormous lobbying blitz against proposed regulations by the Biden administration that they say will cut their government funding and, in turn, harm enrollees. Supporters of the cuts say that the proposal corrects overpayment, which plans obtain by manipulating the billing system. The potency of the lobbying is a sign of just how ingrained Medicare Advantage has become among seniors over the years — and how important it is to some insurers’ business mix.” [Axios, 3/28/23]
Stat: Denied By AI: How Medicare Advantage Plans Use Algorithms To Cut Off Care For Seniors In Need. “Behind the scenes, insurers are using unregulated predictive algorithms, under the guise of scientific rigor, to pinpoint the precise moment when they can plausibly cut off payment for an older patient’s treatment. The denials that follow are setting off heated disputes between doctors and insurers, often delaying treatment of seriously ill patients who are neither aware of the algorithms, nor able to question their calculations. Older people who spent their lives paying into Medicare, and are now facing amputation, fast-spreading cancers, and other devastating diagnoses, are left to either pay for their care themselves or get by without it. If they disagree, they can file an appeal, and spend months trying to recover their costs, even if they don’t recover from their illnesses.” [Stat, 3/13/23]
Medicare Rights Center: New Campaign Urges Commonsense Medicare Advantage Reforms. “A new national survey shows current and future Medicare beneficiaries agree—they overwhelmingly support addressing MA payment flaws, including as outlined in the 2024 AN:
- 90% favor reforms to reduce MA overpayments.
- 70% want policymakers to prevent fraudulent MA plan billing practices.
- 65% say MA plans should be held accountable for providing value to beneficiaries and taxpayers.” [Medicare Rights Center, 3/23/23]
Health Affairs: Born On Third Base: Medicare Advantage Thrives On Subsidies, Not Better Care. “Over the past seven years, Medicare Advantage’s (MA’s) enrollment has almost doubled, adding 10 percent to its market share , now at 49 percent… The Medicare Advantage industry’s explanation of its success is grounded in claims about MA’s ability to deliver Medicare Part A and B benefits for much less than TM. These savings are, in theory, the basis for the rebates, the incremental revenue CMS pays to plans that fund the improved benefits and lower premiums as compared to TM, which in turn help attract members to MA plans… However, a close examination of the bid process reveals that most of these savings are artifacts of the process and not due to better or more efficient care. They result from including “induced utilization costs” from Medicare supplemental insurance, legislated increases in the benchmarks, and risk score gaming.” [Health Affairs, 3/27/23]
Stat: Key Senators Blast Medicare Advantage Insurers For ‘Exorbitant Salaries,’ ‘Massive Payouts’ To Execs. “Sens. Elizabeth Warren (D-Mass.) and Jeff Merkley (D-Ore.) slammed seven different Medicare Advantage insurers for lobbying against proposed rate cuts to the program while their executives still collected ‘exorbitant salaries’ and gave ‘massive payouts’ to their shareholders. The strong language came in a series of letters from the two key Senate Democrats to Humana, Centene, UnitedHealthcare, Aetna CVS Health, Molina Health, Elevance Health and Cigna — which collectively account for 70% of the market for Medicare Advantage, a private alternative to traditional Medicare. Nearly all of those companies, along with the insurance industry’s major trade group, America’s Health Insurance Plans, have been pushing back against a Biden administration proposal that would cut baseline payments to the plans by 2.3% in 2024.” [Stat, 3/23/23]