"Don't Pit Children Against Seniors"--The AHIP Takes the Medicare Advantage Debate to Another Low

When the health insurance industry trade association, AHIP, tried to employ the NAACP in their battle to protect Medicare Advantage (MA) payments last May by arguing higher payments to the industry are good for poor people, I asked, could they have sunk any lower?

From the looks of a letter to the editor in Sunday’s Washington Post, the answer is yes.

The title of AHIP CEO Karen Ignagni’s letter is, “Don’t Pit Children Against Seniors.”

In her letter she makes a number of points:

• Proponents would strip “funds from the Medicare Advantage program, on the theory that health plans providing comprehensive protection from seniors are overpaid.” What “theory?” They are overpaid. The CBO has clearly documented that only a portion of the amount MA plans are paid in excess of standard Medicare goes for extra benefits for seniors. Does she have evidence to the contrary?
• That Congress “corrected” the “inequity” in payment rates when it increased payments that had barred senior participation particularly in “mid-size cities, small towns and rural areas from access to Medicare Advantage.” Yes they did--ultimately through the creation of the Private Fee For Service program which now pays the plans an average of 19% more than standard Medicare. But the Congress never intended that to be more than a transitional strategy—not permanent corporate welfare.
• “The push to cut reimbursement ignores the value not only of the added benefits but also of bringing coverage choices to more areas, as Congress mandated in 2000.” All of the data points to MA plans having higher benefits but only because they are paid more. And, the data shows that not all of the extra payments go to more benefits—these payments also go to profits particularly for the Private Fee For Service plans. Is she suggesting that the private Medicare market deserves payments--and senior benefits--that are permanently higher than the traditional Medicare plan receives for each senior it covers?
• “The Congressional Budget Office predicts that 3 million seniors—mostly rural Americans—will lose their Medicare Advantage coverage altogether if the House bill becomes law.” I am sure that is right. But the CBO is right more because the plans that have been gaming the Private Fee For Service payment system won’t any longer be able to do it and will leave those markets.
• And then the big one: “There’s no justification for pitting children against seniors.” Damn right. So, why are you making this into a kids versus seniors issue?
  

Private Medicare is an experiment that we have got to see through to determine if the market is in fact an answer to making Medicare sustainable.

But, that experiment should be about an honest competition between the private sector and government. Head-to-head. No unfair advantages--either way.

Priming the pump with extra dollars to get the private sector into the business and encouraging seniors to try it is a fair policy.

But it becomes nothing but corporate welfare when industry leaders try to defend it in a way that ignores the original intent.

It becomes just disgusting when they bring the likes of the NAACP and kids into it.

Does Karen not have confidence that her industry, in a fair and even competition, can beat the government?

Original Washington Post editorial