Editorial: Not much of an advantage
Private Medicare plans have not lived up to their promises of greater efficiency.
The Obama administration is tightening the rules on private Medicare plans to reduce the number of versions, a much-needed move toward greater transparency. The rule changes would also limit patients’ copayments to the amounts charged under traditional Medicare.
The changes are likely just the opening gambits in cutting private Medicare Advantage plans, a course that will meet with industry resistance and protests among some consumers.
President Obama should stay the course.
While some Advantage plans are popular among some senior citizens who like having the choice, the plans are proving too costly for taxpayers, who must foot the bill. Plus, the private plans are open to marketing scams that victimize an often vulnerable population.
A fair, rational health care system for all Americans will have to be paid for, in large part, by eliminating waste and fraud in the current system. Private Medicare plans are prime targets on both counts.
The government figures that, on average, it pays about 14 percent more to cover older Americans under private Medicare plans than under traditional Medicare. Surely this is not the outcome the Bush administration intended when it touted private plans as the means to allow competition to wring efficiencies from a bloated public system.
Still, the new Democratic administration in Washington does not plan to end Medicare Advantage. It proposes to cut payments 3.75 percent overall to the private medical plans — hardly excessive, given the apparent high overhead introduced by market dynamics.
The rein on profits might also help rid the program of some bad actors, whose agents have been accused of tricking sick old people into giving up their Medicare coverage for policies that lack the coverage they need, yet cost the government more in premiums.
Greater transparency is likely to reduce confusion and also act as a curb against the worst abuses.
The Obama administration should be more aggressive still, though, in insisting that private plans be at least as efficient as traditional Medicare in delivering health care to senior citizens — and do so no matter what the insured’s health status might be.
Medicare Advantage ought to work to the advantage of the American taxpayer, after all, or cease to exist.