The Many Disadvantages of Medicare Advantage

June 9, 2024

Commentary by Ed Weisbart MD, PNHP National Board Secretary

Our health is just an innocent bystander in the wake of damage the corporate insurance industry is inflicting on Americans, and Medicare Advantage (MA) extends their greedy grasp to seniors and people with disabilities. As the new report Taking Advantage from Physicians for a National Health Program (PNHP) concludes, “MA represents the worst of private insurance coming to take over the best system of health care that America has to offer.” The findings were presented and discussed at a webinar on June 3.

This report reveals that the damages inflicted on us by MA are far worse and more pervasive than most had realized. Nearly twelve million people in MA are in networks that exclude more than 70% of the physicians in their county. More than seven million have such high out-of-pocket costs that they have no choice but to avoid medically necessary care. Prior Authorizations and other egregious HMO-style tools are rampant. Virtually none of these things happen in Traditional Medicare, and few people joining MA are aware that they are making this life-threatening gamble.

That’s right, it’s life-threatening. These MA programs are not just inconveniences or annoyances: they have been shown to kill us.

As an example, one of the dozens of studies cited in the PNHP report determined that people in MA are twice as likely to die after pancreatic cancer surgery than are people in Traditional Medicare.

Despite an overwhelming mountain of similar evidence, the insurance industry has the audacity to claim that they are the solution to America’s problem with inequities in healthcare. They justify this claim by the fact that people of color along with others with limited financial resources are more likely to sign up for MA than the rest of the country. But is that proof that they help, or is that not actually proof that MA is one of the drivers of health inequity?

Medicare itself is far from perfect; an unacceptably high 25% of white and 27% of Blacks in Traditional Medicare cite cost-related problems accessing care if they are in fair or poor health. The racial difference skyrockets in MA, where 35% of white Americans and 50% of Black Americans have this problem. MA is not a solution to inequities; it’s one of the drivers. People with more financial means reject the inferior insurance that is Medicare Dis-Advantage.

The PNHP report also cites studies demonstrating geographic disparities. 42% of physicians in metropolitan areas, and 65% of physicians in rural areas, are not in MA networks. Given the paucity of physicians in rural areas, this translates into prohibitively long commutes for a simple blood pressure visit. No one warns rural Americans of this when they opt into MA.

Insurance corporations have stopped hiding this from their shareholders. Tom Cowhey, chief financial officer of CVS, declared that that they are looking at pulling out of communities where they make less profits, cutting back on benefits like hearing and vision care, and maybe even more. As Cowhey put it, “the goal is margin over membership… Lose up to 10% of our Medicare members? That’s okay.”  CVS isn’t alone; Humana, Centene, and others are being just as honest about their indifference to the harms they cause in the name of their profiteering.

Compare CVS’ corporate mantra of “margin over membership” with a couple of the advocacy community’s flagship messages, “Patients Over Profits” and “Care Over Cost”. Our allies at People’s Action have a campaign centered on the mirror-image inverse of the insurance industry’s misguided philosophy and inescapable subordination to profits before people, regardless of the harm they cause.

The bottom line here, as spelled out in PNHP’s report and webinar, is that we are all being cheated by MA. Their industry was created with the promise that they could improve our health and lower costs by coordinating, informing, and managing care. Instead, the insurance industry has clearly learned that they make more profits by delaying, denying, and interrupting healthcare. They are not doing what they are paid (overpaid!) to do. It’s time we stopped them from taking advantage of us.

Despite the overwhelming evidence of harm, it would be a mistake to call for an isolated end to MA and add another disruption to healthcare for the millions of seniors and people with disabilities who are currently in MA. Many are there today because they are unable to purchase a Medicare supplemental policy and can’t dare risk the financial ruin of Traditional Medicare’s copays and deductibles. Many are in MA because of the promise of extra benefits (hearing, vision, dental, pharmacy, etc.) that go beyond what’s included in Traditional Medicare today, though we know few actually use those extra benefits and most find them to be grossly inadequate shadows of real benefits.

And, frankly, the data in PNHP’s report is national data about the industry as a whole, but there likely are some MA plans that are better than the patterns seen when data is averaged across the nation. Unfortunately, as pointed out in the webinar, there is virtually no public data for comparing those individual plans. To paraphrase Alex Lawson of Social Security Works, that’s like having the FAA tell us that one airline’s planes are frequently crashing, but not telling us which airline that is. Just let the free market sort it out.

We must continue to fight for improvements to Traditional Medicare, coordinated and synchronous with the elimination of MA subsidies, so that savings from MA can be used to help fund the improved benefits across all of Medicare.

Watch the webinar, and then take the actions suggested there. We win when we’re organized…