This is especially interesting in light of the Centers for Medicare and Medicaid Services ordering WellPoint to temporarily suspend enrollment and marketing efforts for its Medicare plans on Monday. The Los Angeles Times reports that the sanctions followed a "sharp" increase in complaints. Reportedly, some customers of WellPoint were unable to receive their prescription drugs while others were overcharged because of computer mistakes.
Along with President-elect Obama, Senate Majority Leader Harry Reid (Nev.) has signaled his intent to "scale back" the Medicare Advantage Program, according to The Hill. Medicare Advantage plans offer health insurance to more than 10 million of the 45 million Medicare benficiaries. However, the Medicare Payment Advisory Committee reports that Medicare Advantage plans cost the government 13% more per beneficiary on average than Original Medicare in 2008.
Democrats say that $15 billion of the annual $94 billion in subsidies granted to Medicare Advantage plans are the result of "overpayments."
Surely, any attempt to eliminate Medicare Advantage plans from the Medicare program will be met with fierce opposition from private insurance companies. In response to the threat of elimination, America's Health Insurance Companies said that the so-called "overpayments" are used to help purchase prescription drug coverage, vision care, and chiropractic services for which Original Medicare does not pay.
There may be some merit to this argument as Original Medicare is lacking in many crucial coverage areas, including dental services which left untreated can be fatal. Thus, it is quite possible that the elimination of Medicare Advantage plans could result in many seniors facing
reduced benefits, limited health care choices and higher out-of-pocket costs,
according to America's Health Insurance Companies.
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It will be interesting to see how seniors react to cutbacks in Medicare Advantage or the elimination of a choice in their Medicare coverage. In Arizona, for example, almost 40% of seniors are enrolled in Medicare Advantage plans. In states where such large numbers of seniors are going to be faced with a drastic change in their Medicare coverage, the politics should be interesting to watch.
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