We Medicare beneficiaries depend on a hidden group of nameless academic goo goos and healthcare-/insurance-company executives to be our representatives to the government. The group is called the Medicare Payment Advisory Commission or MedPAC for short. As stupid as that sounds (not very representative of us), that's the best we'll get so I sent the following letter to two or three of the newly named MedPAC respresentatives (MedPAC itself cannot be reached unless you go by their office in Washington).
I am a beneficiary of a public Part C Medicare Advantage health plan. Because you are a MedPAC member, I write to protest that MedPAC perpetuates many misconceptions about public Part C Medicare Advantage health plans. Chapter 13 of MedPAC's annual report to Congress of March 2014 is full of propaganda code words and other vague wording on minor aspects of Part C of Medicare. Conversely MedPAC chooses not to report on major and more germane issues that would inform current debate about Medicare reform. The subject of capitated-fee health insurance is not that complex; it’s been around for 40 years. It would be just as easy for MedPAC to use meaningful and correct wording as it is to use vague and propaganda wording. And it would not be much more difficult to address the important issues of the day instead of some of the inside-baseball administrivia in the report.
Examples of such vagueness and propaganda code words (and avoidances) relative to the public Part C Medicare Advantage program (from Chapter 13 of the March 2014 MedPAC report) include:
- MedPAC consistently refers to a public social insurance program, Part C of Medicare, as "private." Calling a public program 'private" is pure propaganda on MedPAC's part. Those of us on Medicare understand the multiple differences between fee-for-service (FFS) Medicare and capitated-fee Medicare. They are clearly spelled out on page 16 of the Medicare and You booklet each year. Private and public are not one of those differences; the words appear nowhere on page 16 (at least in the last few years; I cannot speak to history prior to my joining Medicare). Parts A and B are as private as Part C. Part C is as public as Parts A and B. The real differences, as you know, relate to the classic difference between indemnity insurance vs. managed care insurance. The fact that MedPAC’s staff knows this is and yet continues to use the political code word, “private,” is disturbing
- MedPAC draws an odd connection between Part C plan bids coming down "in relation to FFS spending" and the increasing popularity of public Part C Medicare Advantage health plans.
- I would think the bids are coming down because the Patient Protection and Affordable Care Act (PPACA) of 2010 requires them to come down.
- On the other hand, Part C plans remain popular (and even increase in popularity) because capitated-fee Medicare provides real insurance (e.g., an annual OOP limit) and FFS Medicare does not. We seniors are not the stupid people that the propagandists on the MedPAC staff seem to think we are; if FFS Medicare's lifetime limits were removed, FFS Medicare might be more popular.
- Neither the current popularity of Part C nor a change to FFS Medicare has/would have anything to do with Part C bidding (I believe the framework/benchmark/bidding/payment system is Byzantine to say the least; why doesn’t MedPAC recommend changing it?)
- In addition to an annual OOP limit, capitated-fee Medicare also provides other benefits not provided in FFS Medicare (these benefits differ from Part C plan to Part C plan as you know). Therefore the wording at the beginning of (and elsewhere in) Chapter 13 of the March 2014 MedPAC annual report is vague and unclear.
- When MedPAC says the Trust Funds expended $146 billion in 2013 to cover Part A and Part B services for capitated-fee Medicare beneficiaries,
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- Is it saying CMS expended additional Trust Fund monies for lower co-pays, annual physicals, vision and other care, and so forth, not covered by FFS Medicare?
- Or is MedPAC purposely not explaining to the reader that capitated-fee Medicare provides all these additional benefits for what turns out to be a very small amount of additional money per capita?
- To be clear, I totally support parity between the “voucher” given those Medicare beneficiaries on FFS Medicare and the “voucher” given those of us on capitated-fee Medicare -- what MedPAC calls a financially neutral payment policy -- on a fairness basis. I believe the assistance to the poor and minorities that caused the lack of parity between 2005 and 2010 (and to a much lesser extent in 2011-2014) should be handled in some other way just as it is in FFS Medicare. But based on this MedPAC report, the Obama administration would only need to cut payments to capitated-fee Medicare administrators by about $4 billion to $8 billion a year to achieve parity. Why does PPACA supposedly call for $20 billion a year in cuts? This is another of many really germane questions the MedPAC annual report totally neglects.
- The way MedPAC views the popularity of public Part C Medicare Advantage health plans is skewed by what appears to be a basic market misunderstanding. MedPAC implies that the Medicare beneficiary's choice is between FFS Medicare and capitated-fee Medicare (for example, wording on this appears on the top of page 324 but it also appears elsewhere often). Everyone on Medicare is on Medicare (what MedPAC calls traditional Medicare in some places); it doesn't matter if I am on FFS Medicare or capitated-fee Medicare... I am still on Medicare Parts A and B (although I understand that a relatively small percentage is just on A and a very very small number of people are just on B). In order to sign up for a public Part C Medicare Advantage health plan a beneficiariy must first have Part A and Part B. The choices from a market perspective are not between FFS Medicare and capitated-fee Medicare but are between using public capitated-fee Medicare as both basic insurance and as a supplement vs. using private plans from former employers or Medigap as a supplement to FFS Medicare (and to a much lesser extent using spouses' plans, the VA, Medicaid and less common options as supplements--including continuing to work because the SS FRA has been raised)
- MedPAC claims in multiple places that the lowering of the capitated fees lead to more efficiency on the part of capitated-fee Medicare administrators. I don’t follow that logic but more important I do not see any mention of the effects on the insured: that premiums have increased (don’t give me the canard about average premiums), networks have become much tighter, and the annual OOP limit increased by 20% or so on average. This is also most likely the reason the number of plans shrank as indicated on page 330. (However, as indicated above, I am not arguing against parity, just against misleading wording.)
- MedPac talks about the quality bonus program (which is not very useful in terms of what determines quality) but makes no mention of the fact that a major part of the bonus program was found to be illegal by the Government Accounting Office (GAO). The reason according to the GAO: it could not prove anything because almost everyone got a bonus for showing up. Yet, MedPAC says that the bonus program proves that quality bonuses work.
- MedPAC talks about lower administrative costs in FFS Medicare with no mention of fraud, waste and abuse that some -- including the immediately previous Medicare director -- have estimated to equal 20% of spending (perhaps fraud, waste and abuse are mentioned in another chapter of the annual report).
- MedPAC refers to research about 10-year-old data on risk adjustments as if the years covered by the data were recent (and as if the results -- if they were relevant and actionable -- were caused by PPACA when in fact they would have been the result of the Medicare Modernization Act of 2003—if there were any relation at all)
- MedPAC often mentions the margins for public Part C plan administrators without mentioning the margins of MACs (maybe it does in another chapter), or mentioning that the MACs and Part C administrators are often the same companies, or mentioning (I believe I am correct) that a large percentage of the Part C plan administrators are non-profit.
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