Not all Medicare Advantage plans are bad
October 2009: Opponents of Medicare Advantage have a mantra that says private Medicare plans receive fourteen percent more money per enrollee than is spent on the average Medicare beneficiary. President Obama and legislators writing healthcare reform bills all agree that billions of dollars must be cut from Medicare Advantage plans over the next five years.
But it turns out an important government report has positive things to say about some Medicare Advantage plans. HMO Medicare plans have been around for many years and Health Maintenance Organizations (HMO’s) were the model for saving money and managing patient care over 20 years ago. Here are some excerpts from a report by the Medicare Payment Advisory Commission. This group advises Congress on Medicare policy and payment issues. The excerpts are from page four of the report.
“In aggregate, the MA program continues to be more costly than the traditional program. As an exception, HMOs continue to bid below Fee-For-Service (FFS), bidding 98 percent of FFS in 2009.”
“MA plans provide enhanced benefits to enrollees, but, except for HMOs, which finance a portion of those benefits through bids below FFS, the enhanced benefits are financed entirely by the Medicare program and by beneficiaries—and at a high cost. For example, each dollar’s worth of enhanced benefits in PFFS plans costs the Medicare program more than $3.00.”
“Quality is not uniform among MA plans or plan types. High-quality plans tend to be established HMOs; plans that are new in the MA program have lower performance on many measures.”
So it looks like HMO’s actually save Medicare money, because for every dollar Medicare spends on the average Medicare beneficiary, it pays 98 cents for each enrollee in a Medicare HMO. HMO’s have been around for many years in Arizona, California, Florida, and Oregon. And many of those HMO’s are “high-quality”. This kind of report gives me confidence that money-saving, high-quality HMO plans will be around for the future- as long as the politicians don’t throw the baby out with the bathwater as they try to reign in Medicare Advantage.
