Managed Care - September 2008 - (Page 26)

sophical debate about the Medicare program. Democrats are philosophically not as GAO: What’s the policy goal? strong on this idea of Medicare Advantage Policymakers need to consider whether the reduced cost sharas the Bush administration and the Reing, lower premiums, and added benefits are worth the extra publicans. cost of MA, says the Government Accountability Office. “HowFor managed care, says long-time health ever, if the policy objective is to subsidize health care costs of policy analyst Bob Laszewski, the election low-income Medicare beneficiaries, it may be more efficient to is something to fear. directly target subsidies to a defined low-income population “This first whack at the private Medicare than to subsidize premiums and cost-sharing for all MA beneficiaries, including those who are well off.” program is just the beginning of a rout that will take place after the elections when there Source: Medicare Advantage: Higher Spending Relative to Medicare Fee-for-Service May Not Ensure Lower Out-of-Pocket Costs for Beneficiaries GAO-08-522T will be an even bigger Democratic conhttp://www.gao.gov/new.items/d08522t.pdf gressional majority and a president who isn’t going to fall on his sword to protect the health insurance industry — McCain or Obama,” will likely mean changes to the benefits that are ofLaszewski wrote recently. “The only real political fered in Medicare Advantage, higher premiums and leverage the health insurance industry had going for likely fewer choices for America’s seniors,” Wellit this year was the threat of a Bush veto of any Point noted in a statement to MANAGED CARE. “It is changes to private Medicare. important to note that the impact of this legislation MA plans were paid $59 billion in 2006 — $7.1 will not immediately be felt by our members, but billion more than the cost of covering the same rewill impact Medicare beneficiaries beginning in cipients with traditional Medicare, James Cosgrove, 2010.” the Government Accountability Office’s acting diFor a major insurer like Humana, which barrector of health care, testified earlier this year. From reled into private Medicare plans in a big way, any 2009 to 2012, that will cost Medicare an additional adjustments to the program are a sensitive topic. $54 billion. PFFS plans spent 3.6 percent of revenue Humana gets 60 percent of its revenue from the on marketing and sales compared to the 2.4 percent 1.35 million members it has enrolled in Medicare average for all MA plans, he added Advantage. Slightly more than half of those members are in PFFS plans. “We expect only 6 percent of our current private Big unknown fee-for-service membership” is at risk of being There’s a big unknown in Medicare Advantage,” forced out of the company’s plans, Humana Chief says McGill. Plans are being overpaid by the govExecutive Mike McCallister told analysts in Auernment in comparison to traditional Medicare. gust. “We are prepared to preserve what we have.” “Will the government address that, squeeze that Most of the public fighting has been left in the down? Then the leverage you get from Medicare hands of America’s Health Insurance Plans, which Advantage becomes much smaller. It’s costing them mounted an aggressive marketing campaign aimed 10 percent to 20 percent more for people to go into at getting Congress to back away from trimming these plans. [The congressional advisory group Medicare Advantage by presenting the cuts as a net MedPac estimated an average of 17 percent more.] loss for seniors. It was a campaign that failed. And because they are paying more, that means the “It’s too early to tell how Congress will vote to employer is paying less.” fund the next payment fix,” says AHIP spokesman And it’s a lucky retiree who has a former emRobert Zirkelbach. “There will continue to be much ployer to pick up any of his health care costs. discussion about Medicare Advantage and we will This is not a bone that health plans like to conhave a lot to say about the value it provides to sentend over in public. Both WellPoint and Humana iors and their high satisfaction with the program.” declined to make company officials available for an Some of that discussion is likely to come directly interview. from seniors in the program. “These reductions — approximately $12 billon “In this more recent environment, the market over five years — in Medicare Advantage funding 26 MANAGED CARE / SEPTEMBER 2008 http://www.gao.gov/new.items/d08522t.pdf

Table of Contents Feed for the Digital Edition of Managed Care - September 2008

Managed Care - September 2008 Editor’s Memo Contents Legislation & Regulation News and Commentary Medication Management Compensation Monitor Archimedes Lends Hippocrates a Hand Some Other Predictive Modeling Programs Messing With Medicare Advantage The Trouble With MAC MedPAC’s Suggestions Sound Familiar The Leader in Patient Satisfaction Formulary Files Plan Watch Tomorrow’s Medicine Ad Index Outlook

Managed Care - September 2008

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