Yes, it make perfect sense, when you realize that: (1) old people are as selfish as everybody else, and don't mind getting more for less at taxpayer's expense; and (2) every time Congress "reforms" Medicare or health care, the insurance companies somehow end up more profitable than ever thanks to their aggressive, dirty lobbying for subsidies and giveaways.
(The same will happen under BaucusCare with mandates, because private insurers will be guaranteed more customers, and they won't have to compete with a cheaper public option, i.e. "socialism.")
In this case, Medicare Advantage was supposed to be "privatized" Medicare, which means, as it usually does with outsourced government services, that private businesses are released from their usual requirement to cut costs and work efficiently because taxpayers are footing the bill no mater what.
Disgustingly, Humana and other private insurers aren't one bit ashamed to march columns of silver-haired geezers to DC to preserve their $12 billion annual subsidy; meanwhile these welfare queens have got sobbing nutjob Glenn Beck and GOP "thought leader" Newt Gingrich shilling for them to teabagging cognitive-dissonance sufferers.
Strange Bedfellows In the Baucus Brawl
By David Whelan
September 23, 2009 | Forbes
"It sounds like Joe McCarthy," said top-rated radio host Glenn Beck on his talk show this morning.
The provocative commentator was referring to, of all things, a dispute over the Medicare Advantage program. Before this week, Medicare HMOs were a favorite topic of nobody but health policy wonks.
Medicare Advantage, whereby the elderly can opt for an HMO instead of the government-run fee-for-service plan, has attracted one in four Medicare members since its creation in 2003, mostly because the government lavishly subsidizes the private plans. These subsidies, which average 14% more money per member than what's spent on the conventional government plan, allow the Medicare HMOs to waive or reduce the $96 monthly premium that members must pay to enroll in ordinary Medicare while also collecting goodies like "silver sneakers" gym memberships.
The growth of Medicare Advantage has been a windfall for the big managed care plans like Humana, UnitedHealth, and Wellpoint, which now cover a total of 10.5 million old people. From 2003 to 2007, during the Bush-years expansion, the Morgan Stanley HMO stock index rose five-fold, mostly attributed to Medicare.
Yet fiscal watchdogs have always viewed the program with suspicion. It costs about $12 billion a year extra to cover Medicare HMO members. There's an irony here since privatization was supposed to save Medicare and taxpayers money. (See "Unfilled Prescription.")
Medicare Advantage plans have also been accused of bad behavior. They cherry-pick the healthiest members (See "How Cherry Picking Could Hurt Obama's Health Care Plan.")
And they've regularly been accused of deceptive marketing practices to get seniors to sign up. During the Bush years, Medicare HMOs collected generous rate increases across the board, by exploiting a formula that favored rural counties packed with seniors. Medicare Advantage plans went nuts signing these folks up, often without doing the hard work of building a provider network of doctors and hospitals.
To make a long story short, Medicare Advantage has always been a ripe target for cuts that would pay for health reform.
But cutting the plans was never going to be easy politically, a situation akin to shutting a military base or closing a tax loophole.
["Keep the guvmint out of my Medicare" indeed! - J]
When threatened with cuts in the past, the plans had orchestrated massive publicity campaigns that involved nudging--some would say scaring--their members into calling their congressmen to complain. During budget debates in the Senate in 2007, Americas Health Insurance Plans, the HMO lobby, flew in hundreds of elderly Medicare Advantage members to act as citizen lobbyists. In an even more cynical move, the health insurance industry cast Medicare Advantage as a plan designed to serve poor blacks and other minorities. Whatever they did worked because attempts at cutting the plan after Democrats took over both sides of the Hill always failed. The Bush White House last year threatened to veto any Medicare bill that cut the HMO reimbursement rates. (See "An Even Earlier Demise?")
Nevertheless, President Obama, starting during the campaign, has promised to cut Medicare Advantage.
Humana, the most Medicare Advantage-heavy company, with 1.5 million Medicare members and $1.1 billion in annual Medicare-related profits, has been a question mark on Wall Street since Obama's election because of fears that its golden goose may be cooked.
Those industry fears are getting closer to reality. According to the more moderate version of the bill, released last week by Sen. Max Baucus who chairs the Senate Finance committee, Medicare Advantage will face $123 billion in cuts over the next 10 years.
In anticipation, earlier this month Humana sent a letter to its Medicare members, asking them to join a "Partners" program that would help lobby lawmakers to keep funding intact. The letter included the warning that health reform "could mean higher costs and benefit reductions." See an example of the letter here.
Baucus, a target of earlier rounds of Medicare Advantage lobbying, struck back, asking Medicare to tell Humana to cease making such communications with its members. "It is wholly unacceptable for an insurance company to mislead seniors," said Baucus in a statement. Medicare complied. (Read the letter.)
Humana backed down and closed its Partners program. But in a statement, spokesman Jim Turner said that Humana believed it did nothing wrong by sending out the mailer and that: "Medicare Advantage members deserve to know the impact that funding cuts of the magnitude being discussed would have on benefits and premiums."
Which brings us back to Glenn Beck. Since the Baucus-Humana brouhaha transpired earlier in the week, Beck and other ideological opponents of ObamaCare have been rallying around Humana and the Medicare Advantage program. On Beck's show he said that the president and his allies are targeting free speech--and thus the McCarthy reference. Yet the irony here is that free-market ObamaCare opponents are now casting their lot with a government program that has been a giveaway of taxpayer money for years. Does that make any sense?
By David Whelan
September 23, 2009 | Forbes
"It sounds like Joe McCarthy," said top-rated radio host Glenn Beck on his talk show this morning.
The provocative commentator was referring to, of all things, a dispute over the Medicare Advantage program. Before this week, Medicare HMOs were a favorite topic of nobody but health policy wonks.
Medicare Advantage, whereby the elderly can opt for an HMO instead of the government-run fee-for-service plan, has attracted one in four Medicare members since its creation in 2003, mostly because the government lavishly subsidizes the private plans. These subsidies, which average 14% more money per member than what's spent on the conventional government plan, allow the Medicare HMOs to waive or reduce the $96 monthly premium that members must pay to enroll in ordinary Medicare while also collecting goodies like "silver sneakers" gym memberships.
The growth of Medicare Advantage has been a windfall for the big managed care plans like Humana, UnitedHealth, and Wellpoint, which now cover a total of 10.5 million old people. From 2003 to 2007, during the Bush-years expansion, the Morgan Stanley HMO stock index rose five-fold, mostly attributed to Medicare.
Yet fiscal watchdogs have always viewed the program with suspicion. It costs about $12 billion a year extra to cover Medicare HMO members. There's an irony here since privatization was supposed to save Medicare and taxpayers money. (See "Unfilled Prescription.")
Medicare Advantage plans have also been accused of bad behavior. They cherry-pick the healthiest members (See "How Cherry Picking Could Hurt Obama's Health Care Plan.")
And they've regularly been accused of deceptive marketing practices to get seniors to sign up. During the Bush years, Medicare HMOs collected generous rate increases across the board, by exploiting a formula that favored rural counties packed with seniors. Medicare Advantage plans went nuts signing these folks up, often without doing the hard work of building a provider network of doctors and hospitals.
To make a long story short, Medicare Advantage has always been a ripe target for cuts that would pay for health reform.
But cutting the plans was never going to be easy politically, a situation akin to shutting a military base or closing a tax loophole.
["Keep the guvmint out of my Medicare" indeed! - J]
When threatened with cuts in the past, the plans had orchestrated massive publicity campaigns that involved nudging--some would say scaring--their members into calling their congressmen to complain. During budget debates in the Senate in 2007, Americas Health Insurance Plans, the HMO lobby, flew in hundreds of elderly Medicare Advantage members to act as citizen lobbyists. In an even more cynical move, the health insurance industry cast Medicare Advantage as a plan designed to serve poor blacks and other minorities. Whatever they did worked because attempts at cutting the plan after Democrats took over both sides of the Hill always failed. The Bush White House last year threatened to veto any Medicare bill that cut the HMO reimbursement rates. (See "An Even Earlier Demise?")
Nevertheless, President Obama, starting during the campaign, has promised to cut Medicare Advantage.
Humana, the most Medicare Advantage-heavy company, with 1.5 million Medicare members and $1.1 billion in annual Medicare-related profits, has been a question mark on Wall Street since Obama's election because of fears that its golden goose may be cooked.
Those industry fears are getting closer to reality. According to the more moderate version of the bill, released last week by Sen. Max Baucus who chairs the Senate Finance committee, Medicare Advantage will face $123 billion in cuts over the next 10 years.
In anticipation, earlier this month Humana sent a letter to its Medicare members, asking them to join a "Partners" program that would help lobby lawmakers to keep funding intact. The letter included the warning that health reform "could mean higher costs and benefit reductions." See an example of the letter here.
Baucus, a target of earlier rounds of Medicare Advantage lobbying, struck back, asking Medicare to tell Humana to cease making such communications with its members. "It is wholly unacceptable for an insurance company to mislead seniors," said Baucus in a statement. Medicare complied. (Read the letter.)
Humana backed down and closed its Partners program. But in a statement, spokesman Jim Turner said that Humana believed it did nothing wrong by sending out the mailer and that: "Medicare Advantage members deserve to know the impact that funding cuts of the magnitude being discussed would have on benefits and premiums."
Which brings us back to Glenn Beck. Since the Baucus-Humana brouhaha transpired earlier in the week, Beck and other ideological opponents of ObamaCare have been rallying around Humana and the Medicare Advantage program. On Beck's show he said that the president and his allies are targeting free speech--and thus the McCarthy reference. Yet the irony here is that free-market ObamaCare opponents are now casting their lot with a government program that has been a giveaway of taxpayer money for years. Does that make any sense?
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