New York Times Editorial Says Congress Should Eliminate 'Unjustified Subsidies' For Private Medicare Advantage Plans

Main Category: Medicare / Medicaid / SCHIP
Article Date: 02 Dec 2008 - 5:00 PDT

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"Congress clearly has more work to do to remove unjustified subsidies that prop up many of the most inefficient" private Medicare Advantage plans, according to a New York Times editorial. The editorial is in response to recent analyses published in Health Affairs that found the plans increased costs of the program without improving care, according to the Times.

The Times writes, "The managed-care plans still arguably do a better job than traditional Medicare at coordinating care and eliminating duplicative services." However, the Times states that "the fastest growth has occurred in private-fee-for-service plans, which do very little to coordinate care" and "simply piggyback on the traditional Medicare program, relying on the same doctors and hospitals while using their subsidies to offer cost savings or extra benefits to enrollees." With the spread of such plans, "Medicare's costs to cover the subsidies have risen" and its "bureaucratic burden and costs" have increased while "there is no sign that these plans provide better quality of care," according to the Times.

Earlier in 2008, Congress began reducing the "unjustified subsidies," but "a lot more needs to be done," according to the Times. The editorial continues, "President-elect Barack Obama called during the campaign for eliminating the excessive subsidies and paying private plans only what it would cost to treat the same patients under traditional Medicare." According to the Times, "That would anger millions of enrollees as well as the insurance companies that use the subsidies to attract hordes of customers," but, "it is only fair to treat all Medicare beneficiaries equally." The Times concludes, "Eliminating the subsidies could provide savings to help finance broader health care reform" (New York Times, 11/29).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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