Medicare Advantage refers to private Medicare plans that are run by insurance companies such as Aetna, Humana, and UnitedHealthcare. These plans have proven to be very profitable for these companies. For example, they currently account for about 48% of Humana’s annual revenues. Unfortunately, this has translated into higher costs to tax payers and poor coverage for the beneficiaries. Originally intended to save money, the government is now paying insurers as much as 128% of the amount Medicare usually spends per patient. Insurers have also been accused of abusive marketing tactics to senior citizens to lure them into purchasing these plans. All the presidential candidates now agree that the Medicare Advantage program has proven to be a failure and that government funding of private Medicare plans should be cut or entirely eliminated.

The Centers for Medicare & Medicaid Services (CMS) announced on April 7, 2008 that they want to pay 3.6% more to these wasteful private plans while they push for cutting payments to medical providers who are in the front lines of delivering lifesaving care. This is clearly a bad idea. The Axis of Waste is at it again.

More info: Senior Journal, Forbes

Filed under: Health Policy