The Medicare Advantage Plans Obama Wants to Defund: More Evidence on their Performance

Almost one in every four seniors is enrolled in a Medicare Advantage (MA) plan. These plans are run by private insurers. They receive a risk-adjusted annual fee for each enrollee from Medicare; and they tend to provide comprehensive benefits, similar to what nonseniors typically have. President Obama says the government is overpaying and wants to cut revenues to these plans by $177 billion over ten years. Industry sources say 5 million seniors would lose their coverage as a result. The Congressional Budget Office (CBO) says that under House Bill (H.R. 3200) 3 million current enrollees would lose coverage, rising to 6 million by 2019.

I previously reported on the relative performance of eight major MA plans vis-a-vis conventional Medicare. Now there is new data for all MA plans versus all standard Medicare in two states: California and Nevada. Assembled by the Agency for Health Care Research and Quality the data shows:

  • Inpatient (hospital) days for MA enrollees were 30% lower than Medicare patients in California and 23% lower in Nevada.
  • Same quarter readmissions in MA plans were 15% and 33% lower in the two states, respectively.
  • Potentially avoidable admissions were 6% lower than for Medicare in both states.

Comments (21)

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  1. Ken says:

    The evidence mounts, and the White House and all the leading Democrats in Congress continue to ignore it.

  2. Joe S. says:

    This really is amazing. These plans are doing precisely what Orszag and his colleages want to happen system wide and they can’t wait for the opportunity to cut them off.

  3. Nancy says:

    I think one of the reasons Obama is having so much trouble is that he keeps saying that the extra payments to the Medicare Advantage plans are just additions to insurance company profits and that the seniors aren’t getting any more benefits than the regular enrollees in Medicare get.

    But all the seniors in these plans know that isn’t true. They are well aware that they are getting extra benefits. That’s why they joined those plans in the first place.

  4. AJ Hill, MD says:

    What do these statistics tell us about the quality of healthcare delivered under Medicare Advantage? The data tell me that Medicare Advantage plans deny payment more frequently than Medicare does? What’s so great about that? Private insurers have been ripping off consumers this way for decades.

  5. Erik Sieurin says:

    I left the US in 1992 just because of the health care system that you people favor. Your point is “how free are you from the Federal Government?” It sounds good, but let me put it another way.
    How free are you if you loose your health care if you loose your job?
    How free are you if you can’t change jobs because you can’t get hired anywhere else because an new employer won’t take you because of a preexisting condition.
    How free are you when it’s the insurance companies that decide how long you stay in the hospital as well as what treatments you get and not the doctors?
    In Sweden where I now live, I was in the hospital for treatment of Atrial Fibrillation which culminated in an ablation. I paid 20.00 usd per night in the hospital and anyone who tries to make the claim the health care quality here is low is just being absurd.
    Since then, I have had no trouble with my heart and am free to go on with my life without having to pay huge costs for the parts of my care which the insurance conpanies would wiggle out of in the US.
    I agree that the health care industry needs to have greater protection from ambulance chasers, I agree that there should be uniformity of regulations between States so that health care providers can operate more on a national, consistant basis, but I still have no confidence in the free market system for good universal health care for everyone.
    The major pharmaceutical companies are intrested in only in the next Viagra, it’s the government that’s doing the cancer reasearch. That’s what the freemarket has done.
    All you have to do is get on an commercial airline flight anywhere and see the results of a free market.

  6. Ken says:

    Erik, what makes you think the US market is a free market for health care? Clearly it is not. However, there is an international free market for health care developing — all over the world (in Singapore, Thailand, India and in Latin America).

    And no, the care is not subsidized by the government as it is in Sweden (for which the Swedes pay really high taxes). But the prices are reasonable and the quality is very high.

  7. John R. Graham says:

    Mr. Sieurin has identified the single characteristic of the U.S. status quo that folks on this blog unequivocally challenge: the government giving your employer monopoly control of your health care dollars. He’s right: We are not free to keep our health care if we lose our job. He’s wrong about the pre-existing condition, but the cost of covering pre-existing conditions is still paid by those with pre-existing conditions through lower wages.

    The Swedish health system is quite politically volatile. I recall about a decade or so ago, the Stockholm County Council privatized a hospital and introduced other reforms, even bringing the nurses’ union onside. I believe that the reforms have been rolled back somewhat subsequently, with a change in ruling party. The Swedish think-tank, “Timbro”, has written a lot about health reform in Sweden(in English, although you might be surprised at how much written Swedish a native English speaker can grasp, maybe about a quarter of what is written).

  8. Art says:

    Waxman and others stated that 6.4 Medicaid/ Medicare “duel eligibles” [eligible for both Medicare being over 65 and Medicaid for being below the poverty line]were switched from Medicaid to Medicare Part D when it was started.

    These “duel eligibles” were a small part of Medicaid roles but used most [66%]of the drugs and probably hit the donut hole more often than non-poor seniors. I find it hard to explain with this large contingent of very ill seniors how the above statistics could be true unless they wwre not included.

  9. Francine says:

    One of the reasons why my parents chose a Medicare Advantage plan was because it focused on preventative care. After they compared traditional Medicare to Medicare Advantage, they found lower deductibles and co-pay costs with a Medicare Advantage plan. There are many different types of Medicare plans. I recommend to find all the available plans in your zip code and to do a plan comparison.

    Regarding the cuts to Medicare Advantage that President Obama proposes, seniors should know that when they make their 2010 Medicare selection later this year, the 1997 Balanced Budget Act included a provision assuring Medicare beneficiaries a smooth and uninterrupted transition in their healthcare coverage should Congress mandate any program changes in the future.

  10. Linda Gorman says:

    One has to be careful in comparing results in Medicare Advantage plans with those from fee-for-service Medicare as there is some evidence that people who have complex medical conditions opt out of Medicare Advantage plans at higher rates.

    It may be easier to get care for complex conditions in the fee=for-service system as one does not have to deal with gatekeepers.

  11. Karen Rowland says:

    I can’t understand why Obama is saying that seniors will have the same benefits under original Medicare when they lose their Advantage Plan. I give people, these Advantage Plans in Hawaii with no premiums to the beneficiary and they get many more benefits and lower their out of pockets costs a lot. If they are costing 12% more than if the person was in original Medicare, they why doesn’t Obama just cut the 12% to the private companies and leave the rest alone?

  12. Gene Powell says:

    I guess I’m a little confused. Isn’t aarp supplemental insurance a Medicare Advantage Plan? My Dad who recently passed away was in Medicare and had AARP supplemental insurance. Doctors visit bills and hospital bills were first sent to Medicare then sent to AARP. Any costs that were not paid by Medicare or AART were sent to me which were nominal or zero.

    Does AARP receive Federal Subsidies? If so, why were they not given a gag order when they publicly endorsed Obamacare?

  13. ken hodne says:

    Its all so simple Obamaha lies everytime he speaks.This is our country and we don’t apologize for being americans.

  14. Erik Sieurin says:

    Everyone loves to talk about the “high” taxes here in Sweden. I think one needs to look at how much disposable income one has here in relation to those high taxes.
    We pay the equivilent of 200 usd per month for full time day care for for 2 children, which includes lunch as well as breakfast when they have to be there extra early. That is 200 for both kids, not 200 per child. I havve nothing at all to pay for the care that i recieved for my heart. If I loose my job, I am still protected. My pension is taken care of as well.
    Mr. Graham points out correctly that there was a great deal of debate over privatization of healthcare here in Sweden. Healthcare is the last vestage of the Social Democratic party’s domain here in Sweden.
    It has been the Social Democratic party that has acted as a conservative party form the perspective that they have been unwilling to make changes. But changes have been made. It is much, much easier to contact a doctor in Sweden now than it was 10 years ago. The lab at the nearest regional hospital to me in my province is run by a private company conracted by the provincial healthcare authority, somewhat like charter schools are run in the States. That is another point that one must understand. The healthcare system is administrated at the provincial level here in Sweden, not at the national level.
    My wife has a healthcare system via her job that is plugged into the public health care system. If she needs a doctor for “routine” illness, she goes to the company doctor. If she needs more serious care which I hope she never ever does, she goes right into the public healthcare system.
    Looking at the problems over here and the problems back home in the States, I prefer the system over here. I cannot imagine having had the heart problems that I experienced over there.

  15. Beverly says:

    I cannot for the life of me understand the negative comments re: medicare advantage plans. I have had one for almost 3 years now, and LOVE IT. I have never been refused a payment, matter of fact my doctor sent me to the wrong lab for a blood test, the plan billed me, I protested, and the plan paid it. If Obama and Congress does away with these plans, I do not know how I will manage. I will probably just die as I cannot afford a regular Medicare supplement.

  16. A Rivera says:

    I am a medicare marketing representative. I work the field for a private insurance company assisting medicare beneficiaries with their plan selection. I come across many different needs which which are sought to be satisfied by a myriad of federal,state and local solutions. The question is which is the best one for them.
    Beneficiaries are being baraged with choices . Some better than others. There is an unfanthomable amount of money intended for their care and there is no doubt that these resources could be consolidated and used more efficiently, good luck.
    What I would love to do is work for the people through the federal government as an agent for the people weeding out these benefits and providing solid meaningful solutions.I would help government by providing reports that would help us connect the dots and develop a better system throughout these United presently divided States. Federal ,state ,city and private programs need to pool their reources for a stronger Medicare for all.
    We are all worth it. We all deserve better health care which is protected by us for us.
    I personally love what I do . I make a difference in choice within the Medicare environment. Policing the choices that beneficiaries make where I represent them would illiminate any conflict of interest and make the medicare beneficiary the priority as it should be.
    The marketing of Medicare Advantage plans through the internet,and by phone is an invitation to exploitation and should not be permitted.
    Together we can find a better way to provide intelligent informed choices for the elderly and diababled persons through proper professional represention.
    A Rivera

  17. David says:

    The sad thing is that these 3 to 6 million Advantage Plan members will more than likely not be able to afford a medigap policy. Many of the members have only had a Medicare Advantage Plan and may not even understand the ramifications of original Medicare’s cost sharing for beneficiaries. You don’t give someone a hand up, just to let go.

  18. Margaret Kurzius-Spencer says:

    Is the difference in inpatient hospital days, readmissions, etc. potentially due to differences in socioeconomic status of MA enrollees as compared with Medicare patients? Have differences in SES, age and education been accounted for?

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  20. Carnafacul says:

    […] […] Florida has a large number of Medicare Advantage plans avaalible.a0 One reason could be the large population of seniors that retire to the state.a0 The first thing to consider if you are looking for a Medicare Advantage plan in Florida is that the plans are NOT state specific.a0 The are in fact county specific.a0 Check here to look up Medicare Advantage plans by state for 2012.a0 Chances are you will find a company in South Florida that is not at all avaalible in the Northern part of the state.a0 One exception to this is United Healthcare.a0 They offer a plan that is identical across the state.a0 This is probably because of the size of the company.a0 They also offer a large network across the state.Source: […]Source: […]Source:

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