|
E-mail this page to a friend!
Senior Citizen Politics
House Begins Hearings on Pay Cut for Medicare
Advantage Programs
Humana could be the big loser says AP report
 March 20, 2007 – Humana is in line to be the big
loser if Congress decides to cut payments to companies that run Medicare
Advantage Plans, according to an Associated Press report in the
Cincinnati Enquirer. And, as the House Ways and Means Health Subcommittee opens
hearings tomorrow, the Humana case is not helped by public records released
Friday showing the company's president, Michael B. McCallister, was paid
$5.87 million last year.
The committee will look at how much the government
spends to insure senior citizens in Medicare Advantage compared with
those in traditional government-run Medicare.
The
hearing will take place at 2:00 p.m. on Wednesday, March 21, in
Room 1100, Longworth House Office Building.
Of the 43 million
Americans covered by Medicare, about 8 million, or 19 percent, receive
their benefits through private company plans. Many Democrats have called
for cutting the government payments to the Advantage Plans.
House Ways and Means
Health
Subcommittee Chair Pete Stark (D-Calif.) cited data from a
Medicare Payment
Advisory Commission
report
that indicated payment rates to Medicare Advantage plans average 112% of
fee-for-service payment rates.
The AP says, "While many major insurance companies
participate in Medicare Advantage, the privately run component of the
government health plan for seniors, Louisville-based Humana Inc. makes
almost half its earnings through the program, according to Prudential
Equity Group.
"By comparison, competitors Aetna Inc. and UnitedHealth
Inc. make just 3 percent and 13 percent, respectively, of their profits
through their Medicare Advantage plans."
Background from the Subcommittee
Of the 43 million Medicare beneficiaries, 8.3
million (19%) are enrolled in what are currently known as ‘Medicare
Advantage’ (MA) plans. These private health plans must provide benefits
covered under traditional fee-for-service (FFS) Medicare (Parts A&B).
Medicare Advantage plans often limit the network of
providers that are available to beneficiaries, may charge an additional
premium and often have different cost-sharing requirements than
traditional FFS Medicare.
Medicare Advantage plans can provide additional
benefits that are not covered by traditional Medicare, such as
eyeglasses and yearly physical exams, but often finance these benefits
through changing the coverage structure of FFS benefits.
The number of private plans available to Medicare
beneficiaries has grown steadily since 2003, as plan payments and
options have increased. There are now eight different types of MA plans:
Health Maintenance Organizations (HMOs); Provider Sponsored
Organizations (PSOs); Preferred Provider Organizations (PPOs); Regional
PPOs; Private Fee For Service Plans; Cost Contract Plans; Special Needs
Plans (SNPs); and Medical Savings Account plans.
According to the Medicare Payment Advisory
Commission (MedPAC), ‘Medicare Advantage’ program payments were on
average 112 percent of FFS expenditure levels in 2006. To create
financial neutrality between private plan and FFS payment rates, MedPAC
has recommended setting MA benchmarks equal to 100 percent of FFS.
“In the past five years, the Ways and Means Health
Subcommittee has failed to conduct oversight of the so-called ‘Medicare
Advantage’ program,” said Chairman Stark in announcing the hearing.
“We are long overdue for an analysis of this
program. I look forward to discussing who is enrolled in these plans –
and how beneficiaries are recruited to these plans. We should also
review what benefits they do and don’t provide, and at what cost to
America’s taxpayers. I’m pleased to offer CMS, MedPAC and CBO the
opportunity to testify on the MA payment system at this first of what
will be numerous hearings on the Medicare Advantage program.”
>>
Click to full AP story at Cincinnati.com
>>
House Ways and Means
Health
Subcommittee
Click to More Senior News on the
Front Page
Copyright: SeniorJournal.com |
