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Monday, May 7th 2007

The NYT Thinks The Private Market Sucks…

…a stunning surprise. Just kidding. Are Medicare Plan C/Medicare Advantage plans costing the government money and screwing over retirees?

Proponents of private plans say they are indisputably good for many older Americans because they coordinate care and may offer extra benefits, like discounts on eyeglasses, hearing aids and dental care.

But federal officials said that the fastest-growing type of Medicare Advantage plan generally does not coordinate care, does not save money for Medicare and has been at the center of marketing abuses.

These “private fee-for-service plans” allow patients to go to any doctor or hospital that will provide care on terms set by the insurer. In most cases, no one manages the care. And some patients have found that they have less access to care, because their doctors refuse to take patients in private fee-for-service plans.

Moreover, those plans may be more expensive than traditional Medicare for some patients, because the co-payments for some services may be higher. The Medicare Payment Advisory Commission says that the cost to the government is also higher because it pays the private fee-for-service plans, on average, 19 percent more than the cost of traditional Medicare.

Percentage of Medicare Enrollees In Medicare Advantage Plans

While, we might argue over what Medicare Advantage plans offer to beneficiaries, the charges of clear fraud are more concerning,

In Georgia, two insurance agents were arrested last month and accused of conspiring to defraud Medicare beneficiaries.

“The agents signed up unwilling consumers and even deceased individuals for private Medicare plans,” said John W. Oxendine, the Georgia insurance commissioner. “This appears to be a national problem, based on my conversations with insurance officials around the country.”

Despite other stories of such practices, trying to blame the fraud on typical sales-reward practices seems ridiculous,

Coventry Health Care offered a three-night trip to Las Vegas as a reward for agents who generated the most applications for its private fee-for-service plans. By the end of January, enrollment “had already exceeded our initial expectations for the entire year,” Coventry said. The company, which trains agents in the “dos and don’ts of marketing,” said it had “an excellent track record” of compliance.

Insurers frequently offer cash bonuses, trips and other financial incentives for agents to increase sales in the Medicare market.

From December 2005 to April of this year, total enrollment in private plans increased 39 percent, to more than 8.5 million. Private fee-for-service plans accounted for more than half of the growth. Their membership rose to 1.5 million, from 209,000 at the end of 2005.

Political Animal uses the NYT article to take the entire idea that the market can do things better to task. Personally, I don’t know enough to form a very sound opinion. And it isn’t like their blog is spouting stats and figures to make me believe they know more than myself. So maybe they should cram a sock in it rather than putting blind faithing in the New York Times.

I will say, as in all things, transparency is key. If there’s a failure, it sounds like a lack of such might be the key.