By Christopher Harper
As the debate over the future of Medicare hits its stride during the upcoming presidential campaign, policymakers should look at the cost of Medicare Advantage plans as one way to save money.
Advantage plans are those run by private insurers rather than the government providing government payments for hospital care and physician costs. My plan also includes drugs, dental, and eye care.
Private plans have been an option in Medicare since the 1970s, but enrollment in private plans remained relatively low through the 1990s. Aside from changing the name of Medicare private plans from Medicare+Choice to Medicare Advantage (also referred to as Medicare Part C), the Medicare Modernization Act of 2003 made significant changes that propelled enrollment growth. The Affordable Care Act of 2010 also made many changes that enhanced plan enrollment. As a result, about half of all seniors have a Medicare Advantage plan, or 30 million people, up from 11.5 million in 2010.
Unlike the government plan for Medicare, which costs me $170 a month, whether in the program or an Advantage plan, the private insurer puts money in my pocket to join.
The coverage costs me nothing other than the fee for Medicare. But there’s a lot more. My Advantage plan gives me a $25 monthly reduction in my Medicare payment or $300 yearly. The plan pays my YMCA membership of $43.10 monthly or about $500 annually. The program gives me a $500 debit card to use mainly for dental work and eyeglasses, and I get a credit of $25 a month, or $300 a year, for over-the-counter drugs and items like throat lozenges. All told, that’s $1,600 a year for just signing up.
I’m not exactly willing to give up these perks, but it seems the government has been awfully generous to the private insurers if they can entice me with all these goodies.
The government pays private insurers about $12,000 a year for people who sign up for Advantage plans—a number that has risen significantly in recent years. That allowance is where I think the government should reassess whether that’s too much money.
Although I realize my health is better than many seniors, I cost my insurer about $1,200 last year. I’ll bet there are more people like me in my county, which is the geographical area upon which the government payouts are based.
According to the Institute for Health Metrics and Evaluation at the University of Washington, Lycoming County, where I live in central Pennsylvania, has seen better health since the 1980s. However, lung cancer and diabetes have increased somewhat.
I think various changes must be made to save Medicare, but I think a good hard look at Advantage programs and how they operate may be a good start without causing significant hardships to seniors.
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