PNHP to CMS: End Medicare Advantage

September 12, 2022

Summary: Medicare Advantage has overwhelming problems, progressive health policy organizations agree. Can it be fixed with a comprehensive set of far-reaching reforms? Physicians for a National Health Program says no – it must be replaced.

Letter to CMS about Medicare Advantage
August 25, 2022
From Susan Rogers, President, PNHP

Administrator Chiquita Brooks-LaSure
Centers for Medicare & Medicaid Services

. . . Medicare Advantage plans have achieved profitability largely by gaming their risk pools, up-coding, and blunt restrictions on care including issuing millions of inappropriate denials for care that met Medicare coverage rules,¹⁴ and minimally if at all by improving care. ^15,16 Typical administrative costs for Medicare Advantage plans, including profits, have been in the 15-20% range^1,17, compared to around 2% for Traditional Medicare prior to the Affordable Care Act.²

It would be far more cost-effective for CMS to improve traditional Medicare by capping out-of-pocket costs and adding improved benefits within the Medicare fee-for-service system than to try to indirectly offer these improvements through private plans that require much higher overhead and introduce profiteers and perverse incentives into Medicare, enabling corporate fraud and abuse, raising cost to the Medicare Trust Fund, and worsening disparities in care.

These problems are not correctible within the competitive insurance business model, and the Medicare Advantage program should be terminated.

Sincerely,

Susan Rogers, M.D.
President, Physicians for a National Health Program

Comment by: Susan Rogers and Stephen Kemble

CMS asked for public comments on how to improve Medicare Advantage. As described last week in HJM, one approach is to list the program’s serious problems, and recommend a broad set of reforms that together are so fundamental and pervasive as to constitute replacing MA.

Yet this may leave CMS with the idea that MA is salvageable, that implementing selected reforms from the list can result in an adequately functioning program. That’s wrong – MA is structurally flawed. Also, excellent reforms even if well-articulated will be weakened or undermined in practice.

Thus, PNHP in its letter to CMS calls for the end of Medicare Advantage. No reforms, no tweaks, instead a new program.

The PNHP letter documents widespread profiteering and abuse by MA plans (read it!), and concludes that these problems cannot be fixed. MA must be replaced.

What’s more likely to work: ambitious reforms, or a clean slate?

But let’s go further. It’s a mistake to isolate the privatization of Medicare (MA and ACO REACH for traditional Medicare) from the exact same issues that affect private health insurance and Medicaid. Removing voracious for-profit entities from Medicare does not advance us to single payer unless we remove them from all health insurance. And saving Medicare does not prevent worsening destruction of other components of our so-called healthcare system. Private equity, venture capitalists and others involved in Medicare are also involved in hospitals, job-based insurance, pharmacy benefit management, and so on. The problem with Medicare is just one metastatic lesion in an entire industry riddled with this cancer. Removing one lesion does not cure the cancer.

That’s why we need single payer.