On January 18, 2023

Traditional Medicare is under attack

Dear Editor,

I’ve spent my professional life as a primary care pediatrician, mostly in Vermont. Now I’m retired and the beneficiary of Medicare.

I see alarming signs that Medicare, a public good, is being privatized and abused by for-profit insurance companies. Their greed threatens the integrity and sustainability of Medicare.

Medicare Advantage plans are actively hawked on TV by aggressive private insurers who stand to gain handsomely by enrolling healthier younger seniors. Since they are paid based on each patient’s medical record, these private companies routinely “upcode” or exaggerate diagnoses to make their patients appear sicker and thus receive enhanced compensation. One can only use doctors “in network” and care is often delayed or denied by requirements of prior authorization for treatments, medications, tests and consultations.

According to an independent analysis by the Kaiser Family Foundation, in 2019 Medicare Advantage plans cost the government $7 billion more compared to spending for similar beneficiaries under traditional Medicare.

So much of what troubles our current healthcare system is attributable to the dysfunction of private, for-profit companies seeking ways to milk Medicare for their investors’ benefit and to the detriment of seniors.

This is the same “managed care” that was unsuccessful as the HMO model of our recent past. Private companies and accountable care organizations are paid a fixed monthly fee to provide care rather than billing for the care rendered, as is customary with traditional Medicare.

Traditional Medicare is chosen by 52% of seniors. It is now the target of a program initiated by the Center for Medicare & Medicaid Innovation of the Center for Medicare and Medicaid Services during the Trump administration called Medicare Direct Contracting. This program has been given the go-ahead to enroll up to 30 million of the 36 million current recipients of traditional Medicare without their consent in a new arrangement with a direct contracting entity, now called REACH.

These direct contracting entities would be permitted to spend as little as 60% to 75% of their payments on patient care and could keep the rest for profit and expenses. In comparison, traditional Medicare pays 98% of its expenditures on patient care, with only 2% spent for administrative costs. Direct contracting entities have attracted lots of interest from Wall Street investors because they are profitable.

We are still tinkering about the edges of the failed model of health care as a marketplace. It is not, and our health care as a nation suffers from inequality, poor access, and personal expense.

Every other industrialized nation provides nationalized care and gets better outcomes for their public investment in care for all. There are many models, but they are based on the premise of equal access to health care for all. That was the promise of Medicare too, but it is being undermined by greedy insurance companies and investors.

I am reminded of what Winston Churchill said of America: “You can always count on the Americans to do the right thing after they have tried everything else.”

Jack Mayer, M.D., MPH, Middlebury.

Mayer is a retired pediatrician. He is a long-time critic of the private health care system in the U.S.

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