With Medicare Advantage plans, the hits just keep on coming. The hits I am speaking about are the hits to the taxpayer’s wallet. Medicare Advantage plans have shown remarkable ingenuity in figuring out ways to take more taxpayer money than they should. This particular scheme has been around for a while but is only now getting the attention it deserves.
To refresh everyone’s recollection, Medicare Advantage plans were created to save the government money. The idea was that private enterprise could deliver health care to Medicare beneficiaries cheaper and more efficiently than traditional Medicare. Medicare pays a Medicare Advantage plan a fixed amount for each person they enroll. The amount of the payment varies by Zip code to reflect geographical differences in the cost of medical care. The amount of the payment is also dependent on the health of the enrollee. The sicker the enrollee, the more medical conditions he or she has, the higher the annual payment to the Medicare Advantage plan. In return for the annual payment, the Medicare Advantage plan is expected to provide all of the enrollee’s medical care during that year, including any surgeries that might be necessary.
Veterans of the armed forces of the United States may receive their medical care from Medicare or, if they meet certain eligibility criteria, from the Veteran’s Administration. Some Medicare Advantage plans enroll a disproportionately large number of veterans. So far, so good, but there is a reason Medicare Advantage plans actively seek to enroll as many veterans as possible: Veterans are a gold mine for Medicare Advantage plans. This is where the plans are once again taking advantage of us. Recent studies have shown what many people suspected all along. Many eligible veterans in Medicare Advantage plans are going to the VA when they need surgery.
When an eligible veteran is also enrolled in a Medicare Advantage plan and the veteran needs surgery which will require hospitalization, she or he has three options. The veteran may have the surgery at a VA hospital, at a community hospital with the VA paying the bill, or at a community hospital with the Medicare Advantage plan paying the bill. When a veteran enrolled in a Medicare Advantage plan has the VA pay for the surgery either at a VA hospital or a community hospital, the taxpayer is paying twice for the surgery. The taxpayer has paid once when the annual payment was made to the Medicare Advantage plan and pays a second time when tax dollars are used to fund the VA. Meanwhile, the Medicare Advantage plan pockets the money it would have paid for the surgery, had the veteran not gone to the VA.
Under the most charitable view, it is just a coincidence when a veteran in a Medicare Advantage plan chooses to use the VA for a planned surgery. Under the most cynical view, the Medicare Advantage plans are rigging the system so that the VA is a more attractive option for veterans needing surgery. Under either view, however, the cost of the surgery is being shifted from the Medicare Advantage plan to the VA. Medicare Advantage plans should not be able to profit from this cost shifting.
Multiple investigations have explored the many ways in which Medicare Advantage plans enrich themselves at the taxpayer’s expense. This is a loophole which must be closed. However, as I have pointed out many times in the past, the Medicare Advantage plans are sponsored by the largest health insurers in the country. They have lots of lobbyists who work very hard to make sure Congress does not stop the Medicare Advantage gravy train from running. In other words, expect to get fleeced for the foreseeable future.
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