Quack Wharton School Lefty's Theories about Medicare Advantage--Part 2

On June 2 I outlined the first of about a dozen errors in a recent University of Pennsylvania Wharton School Issues Brief by Senior Hater Amanda Starc. The list of errors continues here (the list is not in order of appearance but simply in order in which they appear in the hateful document written by Starc):

  

 

1. See here
2. See here
3. See here
4. “MA plans, originally known as Medicare Part C plans.” This sentence is totally incorrect. These plans were called Choice-Plus plans before 2004 or 2005. But both Medicare Advantage plans and Choice-Plus were and are still Part C plans.
5. “As a result, most Medicare beneficiaries buy some form of supplemental or additional health insurance, either through a former employer or from the individual market. MA is an example of a type of policy sold on the individual market (Medigap is another). In addition to offering lower cost-sharing, MA plans may also offer dental, vision, or drug coverage..” This implies that public Part C plans offer lower cost sharing than Medigap or retiree insurance; typically that is not the case but all policies are different.
6. The Medicare comparison referenced on the second page of the “Issue Brief” referring to a Medicare “compare tool” referenced in Footnote 5 (I assume Starc means the Medicare Plan Finder--see image) is totally valueless the way the Penn Senior Hater is citing it. You cannot compare a public Part C plan vs. Original Medicare only; no one can purchase Part C without first purchasing Original Medicare Parts A and B. And as noted in many places on this blog, almost no one goes without a supplement (that is, no one uses just Original Medicare). The comparison has to be Original Medicare A/B plus C vs. Original Medicare A/B plus retiree vs. Original Medicare A/B plus Medigap plus D (sometimes retirees have to buy D as well).
7. The “reasonable tradeoff” Starc discusses in that same section of the Issues Brief has nothing to do with Medicare or Part C of Medicare. That is simply the way HMOs and other networked plans work for healthcare insurance customers of all ages.
8. Referencing an almost 10-year-old Kaiser study about Medicare Advantage advertising in footnote 7 is just plain bad research but even if the study had any current meaning, so what if insurance companies run more ads for Part C than Part D.
9. This point answers my question in point 3; later in the Issues Brief Starc only claims that beneficiaries "may" be healthier as opposed to stating it to be a fact. I guess he or she has no actual timely research to the “healthier” contention. And he or she is incorrect anyways. In fact the insurers have no incentive to select healthier beneficiaries since – as also noted later in the Issues Brief -- there is a risk corridor plan in the Part C program just like the one used in Obamacare (in fact, Part C of Medicare is where the Obamacare idea comes from)
10. Seventy-five percent of any “extra reimbursements’ to public Part C plan insurers go totally to me, the beneficiary. Starc's quacky theory about it going to advertising or profits and his or her various explanations of the risk corridors illustrates that he or she does not understand how the Part C framework/bidding/benchmark process works (not that I am in favor of that process--see the conclusion to this three-part blog post; I would like to see a simple equal voucher for everyone)
11. Finally, it appears Starc has come up with a very complicated algorithm to prove the obvious: there are more doctor and hospital networks (which are needed in Part C plans) in urban as opposed to rural areas of the United States
12. As an aside, Starc also appears to not understand how TV advertising works in the United States. Not that it seems to matter a lot to his or her theory but I would guess if Penn factored cable TV into the Issue Brief's MSA calculations it would substantially change the results

 Conclusion to follow in a later post