Blog

The privatization of Medicare by Advantage plans

Paco Maribona, CSA

Paco Maribona, CSA

by Paco Maribona, HCAO-Lincoln City
 
Insurers, lobbyists, and many in Congress successfully lobbied against the minor cuts to the Medicare Advantage plans which were supposed to take effect starting 2014, under ACA, the Affordable Care Act (aka Obamacare). Instead of cutting their generous subsidies (often around $800-$1200/person/month) by only 2.2% , they'll be getting a 3.3% raise. 
 
Medicare Advantage plans, including HMOs, PPOs, and other versions, are steps towards the privatization of Medicare. While some of these programs, like Kaiser, can coexist with the traditional Medicare Part A and B and Supplement plans, they are heavily subsidized by Medicare. Right now about 24% of plans are so called Advantage plans (Advantage Insurers). Which if they grow too much, could ultimately kill traditional single payer Medicare. 
 
Attempts to privatize Medicare or Social Security, for the benefit of Wall Street or the 1%, do not benefit the rest of us. It will only make premiums skyrocket ($1,000 -2,000 month or more, compared to $100-200 now), so that only the well off will be able to afford it. It is a lose-lose situation for most Medicare and Social Security beneficiaries. 
 
Medicare and Social Security are programs that are paid into by all workers, then are drawn upon by retirees or the disabled. They are a sacred trust between We the People and our government. Private interests cannot be allowed to take them over and drain the trillions of dollars in their trust funds for private profits. These programs are essential for the health and well-being of our seniors and thus must be protected by our government against predatory piracy. 

With huge subsidies, Medicare Advantage plans are very lucrative to the private sector. Their CMS subsidies were supposed to be slowly cut back. They agreed to run the programs in the place of Medicare, but added significant co-pays and limits (not in traditional Medicare) that members often do not pay close attention to. While premiums for Medicare Supplements vs. Advantage plans are competitive, out-of-pocket co-pays are not. Thus, while some areas even offer zero premium plans, their co-pays run from $3400-$6000, which would add $300-$600/month costs to the "free" plans. Since two/thirds of seniors use these plans, it's not a good deal. 
  
If Advantage plans, especially medical and hospital ones are allowed to supplant Medicare supplements that work in conjunction with Medicare Parts A and B, it could spell the end of Medicare as we know it.  It's up to each of us to do all we can to see this doesn't happen. That means not feeding the privatization monster. 

Which side are you on? Do you or those you know have Medicare Advantage plans, or Traditional Medicare supplements? It matters. So much so, that I and some other agents are refusing to sell Advantage plans, even though it costs us lost revenues. We need to be sure Medicare will be there for all of us, so it can be maintained and expanded to cover all people, not just the well-off.   

Paco Maribona, CSA, Certified Senior Advisor, is a 30-year independent agent in Salishan, Oregon, working to help his clients and community thrive, with personal insurance and safe investments.