Sunday, August 26, 2012
Medicare Advantage Plans: The Facts
Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.
John Adams (1735-1826), In defense of British soldiers involved in Boston Massacre (1770)
Now, what I want are Facts. Facts alone are wanted in life.
Charles Dickens (1812-1870)), Hard Times (1854)
August 26, 2012 - A good friend and I were having a spirited discussion about Medicare Advantage Plans. I insisted Obamacare doomed these Plans. My friend said it was a good thing because the Plans cost too much.
As it turned out, we were both wrong. Medicare Advantage Plans have grown 60% in last 5 years, a good part of it since Obamacare was enacted 2 ½ years ago, Medicare Advantage premiums are down 7 percent, and enrollment is up 10%. More than one-fourth of Medicare’s 50 million enrollees now participate in Medicare Advantage Plans, with more certain to come.
A premise of the health law is that consumers will benefit from market competition, as they have. The government will set up markets, known as exchanges, where seniors can shop for private insurance and get subsidies to help pay for them. In the traditional fee-for-service Medicare, government bears the financial burden. Under Medicare Advantage, private insurers share the burden. Government and private plans compete.
Democrats were full of dire predictions about market involvement in Medicare. Democrats claimed competition, engineered by avaricious private plans, woulf increase costs, even though costs of the Medicare prescription drug law, passed in 2003, are 30% less than predicted.
This 30% decrease in projected costs , over the course of nearly 10 years, has startled Democrats who predicted adverse effects. Nancy Pelosi in 2003 proclaimed“Most seniors will be worse off. This is the beginning of the end of Medicare as we know it.” Senator Tom Harkin of Iowa said, “We hear the claims that private-sector competition will draw down costs and save Medicare. Nonsense !” Worse yet for some Democrat doomsayers, seniors are leaving traditional Medicare, "Medicare as we know it," to join private market-driven plans created and managed by evil HMOs.
Government control vs. market competition sometimes makes for strange bedfellows and unexpected results.
Source: Robert Pear, “Despite Democrats’Warings, Private Medicare Plans Find Success, “ New York Times, August 26, 2012.
Tweet: Both political parties are mostly satisfied with private Medicare Advantage and drug benefit plans despite dire predictions to the contrary.