Wednesday, April 9, 2014

Medicare Advantage plans dodge U.S. cuts | Star Tribune

Medicare Advantage plans dodge U.S. cuts | Star Tribune:

AND, it worked!  Too bad for us.

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1 comment:

Craig said...

Comment by Don McCanne

In an effort to privatize Medicare, conservatives in Congress enacted legislation to provide private Medicare Advantage plans with a 14 percent overpayment in order to unfairly compete with the traditional Medicare program. The Affordable Care Act included measures to gradually eliminate this overpayment. CMS appears to be thwarting the intent of Congress to correct this injustice.

Because of pressure from the insurance industry, the Obama administration used chicanery in the first two years of the ACA implementation to maintain higher Medicare Advantage rates. This year the reduction was to have been 1.9 percent. So the insurance industry initiated an intensive campaign to reverse these reductions. Once again, CMS has used more chicanery to convert their reduction into a 0.4 percent gain - reassuring private insurers that they can continue to expand their private takeover of Medicare.

There are numerous gimmicks that were used, and some of them are quite obscure. Perhaps the most important revision was in the “normalization factors.” Because of the influx of baby boomers into the Medicare program, it was decided to use “a quadratic functional form fit to risk scores from 2010 through 2013” in the CMS Hierarchical Condition Category. To provide “transparency around the calculation of the normalization factors,” they showed “the risk scores used to calculate the normalization factors for 2015.” Glad that’s clear.

Seriously, CMS has used innovative accounting to increase payments to Medicare Advantage plans based on the fact that there is an influx of baby boomers - a subset of Medicare beneficiaries that is younger, healthier, and less expensive than the older beneficiaries already enrolled. Taxpayers will pay more for lower cost beneficiaries. I remember the quadratic equation, but I don’t remember it ever being used to cheat taxpayers and reward the private insurer rentiers.

Rentiers? Those are individuals whose income is derived from capital, and now capital is being concentrated in the top centile. If you missed yesterday’s Quote of the Day on Thomas Piketty’s “CAPITAL,” you should not bother reading the CMS song and dance above, but instead read yesterday’s message.

Congress and the Obama administration are serving the interests of the rentiers, and this Medicare Advantage payment scam is only one example. It is time for the people to take control. As Thomas Piketty wrote, "if we are to regain control of capitalism, we must bet everything on democracy."

qotd: Thomas Piketty - "CAPITAL in the Twenty-First Century"