The Center for Public Integrity. August 17, 2015
Commentary: taking advantage of Medicare Advantage
by Wendell Potter
One of the reasons the health insurance industry worked behind the scenes in 2009 and 2010 to derail Obamacare was the fear that changes mandated by the law would cut their Medicare Advantage profits. Medicare Advantage plans are federally funded but privately run alternatives to traditional fee-for-service Medicare.
Although the industry’s biggest trade group, America’s Health Insurance Plans, said repeatedly that insurers supported Obamacare, the group was secretly financing the U.S. Chamber of Commerce’s TV campaign against reform. Among the companies most concerned about the law were those benefiting from overpayments the federal government had been making to their Medicare Advantage plans since George W. Bush was in the White House.
Bush and other Republicans saw the Medicare Advantage program as a way to incrementally privatize Medicare. To entice insurers to participate in the program, the federal government devised a payment scheme that resulted in taxpayers paying far more for people enrolled in the Medicare Advantage plans than those who remained in the traditional program. The extra cash enables insurers to offer benefits traditional Medicare doesn’t, like coverage for glasses and hearing aids, and to cap enrollees’ out-of-pocket expenses.