Medicare Advantage is not Medicare: it’s private health insurance for seniors that’s largely paid for with our tax dollars. They make their money by routinely denying claims…
Want to invest in a scam that lets you make billions with virtually no risk? If you’re morbidly rich, all you have to do is to open or buy an insurance company that’s offering Medicare Advantage plans.
And now, Republicans are saying that if they retake the White House they will change the Medicare rules so that people newly turning 65 will enroll by default into Medicare Advantage rather than real, traditional Medicare, further enhancing the profits of these massive, billion-dollar insurance giants while rapidly killing off real, traditional Medicare.
This is the culmination of a long-term plan.
George W. Bush ran for both Congress (in 1979) and the White House (2000) promising to privatize Social Security and Medicare. In 2005 he tried mightily to privatize Social Security, scheduling a multi-city tour across America to promote the idea.
He had “political capital” from winning the 2004 election based on his “war president” credential and, he said, he was going to use it.
The more he pitched privatized Social Security plans, however, the more people disliked the idea: Bush gave up about halfway through his tour. But not to mourn: he’d already taken a tire iron to Medicare in 2003, getting half the privatization job done by creating the Medicare Advantage scam.
It was one of the greatest testimonials to the power of lobbying and political bribery in modern American history.
The amazing part is that Medicare Advantage is not Medicare: it’s simply private health insurance for seniors that’s largely paid for with our tax dollars.
With real Medicare, if your doctor says you need a test or procedure, you get the test or procedure. No questions, no delays, no hassles. No pre-approvals.
With Medicare Advantage, though, because it’s run through giant insurance companies who have to figure out a way to skim billions off to top to satisfy their shareholders, virtually everything you do will require pre-approval by your insurance company.
They make their money by routinely denying roughly 18 percent of all claims — 1.5 million claims in 2019 alone — leaving Advantage policy holders with the choice of not getting the tests or procedures they need or paying for them out-of-pocket. (Real Medicare never denies any claims, as they don’t need to generate profits for Wall Street billionaires.)
“Ziggy” is a regular caller into my radio/TV show and last week shared with us his experience in the hospital’s ER the week before. As he went from test to test, people who came into the hospital at the same time had to wait because the hospital was waiting for preapproval from their Advantage insurance companies. One guy had to wait overnight because the company was so slow in their approval.
Ziggy has real, traditional Medicare with a Medigap plan, though, so he didn’t have to wait for a thing. It gave him an opportunity to educate the poor suckers around him about the difference between real Medicare and the so-called Advantage plans that are very much not Medicare.
In my book The Hidden History of American Healthcare: Why Sickness Bankrupts You and Makes Others Insanely Rich, I lay out the story of this scam and how badly so many Americans — and us American taxpayers — get ripped off by it.
These giant insurance companies ripped off taxpayers to the tune of an estimated $140 billion, according to a report from Physicians for a National Health Program (PNHP). If there was no Medicare Advantage scam bleeding off all that cash, real Medicare could be expanded to cover dental, vision, and hearing and even end the need for Medigap plans.
But for now, the gravy train continues to roll along. The insurance giants use some of that money to buy legislators and some of it to dupe seniors into joining their programs. The company (Benefytt) that hires Joe Namath to pitch Medicare Advantage, for example, was hit with huge fines by the Federal Trade Commission for deceptive advertising.
The FTC news release laid it out:
“Benefytt pocketed millions selling sham insurance to seniors and other consumers looking for health coverage,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The company is being ordered to pay $100 million, and we’re holding its executives accountable for this fraud.”
Nonetheless, the Centers for Medicare Services continues to let Benefytt and Namath market these products: welcome to the power of organized money.
And it’s huge organized money. Medicare Advantage plans are massive cash cows for the companies that run them. As Cigna prepares for a merger, for example, they’re being forced to sell of their Medicare Advantage division: it’s scheduled to go for $3.7 billion. Nobody pays that kind of money unless they expect enormous returns.
Traditional Medicare has been serving Americans well since 1965: it’s one of the most efficient systems to pay for healthcare that’s ever been devised. But nobody was making a buck off it, so nobody could share those profits with greedy politicians. Enter Medicare Advantage, courtesy of George W. Bush.
While several bills have been offered in Congress to do something about this — including the Save Medicare Act that would end these companies ability to use the word “Medicare” in their policy names and advertising — the amounts of money sloshing around DC in the healthcare space now are almost unfathomable.
It’s all one more example of how five corrupt Republicans on the US Supreme Court legalizing political bribery has screwed average Americans and made a handful of industry executives and investors fabulously rich.
If Democrats this fall can take a large enough majority of the House and Senate and hold the White House, perhaps we can do something about this. We can certainly stop them from pushing newly-65 seniors into Advantage programs as the default.
The For The People Act, which was killed when Joe Manchin and Kirsten Sinema went along with a united Republican filibuster in the Senate, would have significantly cut back on the power of dark money and campaign bribes.
If we can finally pass it or something like it, then we can try to fix real Medicare without our politicians having to dance to the tune of Big Insurance’s Big Money.
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