Medicare Advantage is a money-making scam, says Wendell Potter, a former health-care executive who helped develop PR and marketing schemes to sell these private insurance plans.
U.S. Capitol complex, Washington, D.C. (Ron Cogswell, Flickr, CC BY 2.0)
By Wendell Potter
Common Dreams
Right now, well-funded lobbyists from big health insurance companies are leading a campaign on Capitol Hill to get members of Congress and senators of both parties to sign on to a letter designed to put them on the record “expressing strong support” for the scam that is Medicare Advantage.
But here is the truth: Medicare Advantage is neither Medicare nor an advantage.
And I should know. I am a former health-care executive who helped develop PR and marketing schemes to sell these private insurance plans.
During my two decades in the industry, I was part of an annual collaborative effort to persuade lawmakers that Medicare Advantage was far superior to traditional Medicare — real Medicare. We knew that having congressional support for Medicare Advantage was essential to ensuring ever-growing profits — at the expense of seniors and taxpayers.
We even organized what we insiders derisively called “granny fly-ins.” We brought seniors enrolled in our Medicare replacement plans to Washington, equipped them with talking points, and had them fan out across Capitol Hill.
I regret my participation in those efforts. Over the 20 years since Congress passed the Medicare Modernization Act, the Medicare Advantage program has become an enormous cash cow for insurers, in large part because of the way they have rigged the risk-scoring system [a way of calculating the expected medical costs of each individual enrolled in a health plan] to maximize profits.
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As Kaiser Health News reported last month, the Center for Medicare and Medicaid Services estimated “net overpayments to Medicare Advantage plans by unconfirmed medical diagnoses at $11.4 billion for 2022.” That was for just one year. Imagine what the cumulative historical total would be.
The Medicare and Medicaid programs have become so lucrative and profitable for insurers that UnitedHealth Group, the nation’s largest health insurer and the biggest in terms of Medicare Advantage enrollment, got 72 percent of its health plan revenues in 2021 from taxpayers and seniors.
In fact, all of UnitedHealth’s enrollment growth since 2012 has been in government programs. Enrollment in the company’s employer and individual health plans shrank by 370,000 between September 30, 2012, and September 30, 2022. Much of the $81 billion UnitedHealth collected in revenues in the third quarter of last year was subsidized by American tax dollars.
Medicare. (Nick Youngson CC BY-SA 3.0 Pix4free)
Members of Congress on both sides of the political aisle — and both sides of the Capitol — are at long last calling for more scrutiny of the Medicare Advantage program.
Sen. Chuck Grassley has called for aggressive oversight of Medicare Advantage plans to recoup overcharges and was quoted in the Kaiser Health News story. As was Sen. Sherrod Brown, who said that fixing Medicare Advantage is not a partisan issue. And as Rep. Katie Porter commented, “When big insurance bills taxpayers for care it never intends to deliver, it is stealing our tax dollars.”
I know that Democrats and Republicans alike care about the financial stability of the Medicare program. Instead of joining with the corporate lobbyists in extolling the benefits of Medicare Advantage while obscuring the program’s numerous problems, and in the process helping Big Insurance make massive profits, Congress should work to lower the cost of health care.
Medicare Advantage is a money-making scam. I should know. I helped to sell it.
And I’m going to continue working alongside patients, caregivers, and elected officials to address the problems.
Wendell Potter is the former vice president for corporate communications at Cigna. He is now president of Business for Medicare for All and author of bestselling books Deadly Spin and Nation on the Take.
This article is from Common Dreams.
The views expressed in this article and may or may not reflect those of Consortium News.
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I pay about 1500.00 a year for Advantage, had heart surgery last year, total bill was 120000.00, I paid 1500. total. High quality care, too. Don’t see a better program out there, of course UHC and the hospitals and DRs. make lots of money, our system is called For Profit Healthcare.
Ralph Nader has called it Medicare Disadvantage for years.
As a former Republican, I find it unseemly tha so many R’s are slobbering over the prospect to gut Social Securiy and Medicare because they are ‘budget busters’. That these programs are ‘bankrupt’. In truth, these are the only govt programs that are funded.
When the overcollection of the payroll tax finally runs out 10yrs from now, we will still be able to fund 80% of the benefits. At that point, we have a choice to only fund 80% of the benefits or increase the payroll tax.
I have long suspected that the Republican scapegoating of Social Security / Medicare is to justify cancelling it and diverting the Payroll tax to the military.
How come Cuba, that poor and abused nation, can afford to provide universal health care FOR FREE??? Perhaps because Cuba is more interested in the well-being of its people than the well-being of thieving health companies? Rich USA can’t even take care of the average citizen.
Totally agree with you ^^
Not to forget the numerous and devastating sanctions the U.S. & Co. have been putting on Cuba and its people.
You are right about Cuba. Not only is healthcare free to citizens, it’s excellent as opposed to the U.S. which is way down the list of good care, and if it were a right for all here, it would be twice the care for half the cost. Cuba trains medical personnel for free and send doctors all over the world to help in disasters. I know how wonderful they are from personal experience.
If I just relied on Medicare I would lose out on the advantages I now get and each year grow.
I now get all the money I pay for Medicare part B given back in almost doublings my low amount SS check. I also get extra money for healthy food and out of pocket health expenses. Free rides to Doctors appointments and all doctor visits and tests paid for. What is bad for seniors about advantage? You will all be in the same boat soon. It is tied to the social Security system.
Trump is warning Republicans to never gut Medicare and Social Security and an y politician who wanted to would get thrown out.
M4A is the answer …
I disagree. Medicare Advantage is extremely advantageous…for insurance companies!
Instead of paying health care providers directly, the government pays private insurance companies who skim a little off the top as “profit” and then pay the providers.
The only objection these members of Congress have is that the insurance companies occasionally just pocket the money without paying the providers. As long as the insurance companies actually pay for medical services (after taking their cut), Congress has no problem with it.
What’s not to like?
Actually, maybe that’s not quite right.
Rather than “skimming” money from the government, the insurance companies are convincing “grannies” that, instead of going on Medicare and having the government pay their doctors directly, they should pay the insurance company a “premium” to collect the money from the government to pay their doctors, because…reasons.
I’m 73 and I have Medicare and a Medicare supplement which pays for that which Medicare does not. Medicare advantage looked to me like a scam and I stayed away from it. Insurance is a bet. You’re betting that something will happen that you’ll want help paying for. Car (and some other insurances) work that way. I had a car insurance claim just recently. First claim in a couple of decades. Claim for health care? That happens every year. There’s no bet involved. For health care we should get off the insurance kick and simply nationalize it. The claims that there will be a shortage of medical care are bullshit. Even with our vaunted “system” that produces some of the worst outcomes in the world, you can’t get health care. And I’m not talking about me. I’m talking about my daughter trying to get a doctor to see my grandson.
You are absolutely right!
Jeff Harrison, well said. Thanks.
Wendell Potter is right. Medicare Advantage is not only a scam, it’s a trap. hxxps://www.facebook.com/groups/PDA.healthcare.for.all/posts/7942414222466510
advantage plans may be bad for the state, but they offer so much more benefits than regular Medicare to their members…
Like limiting the list of providers or hospitals that are covered – requirements for pre-approval of drug, test or therapy?
No, they don’t. More benefits are only available to people also on Medicaid. My Republican aunt told me she was paying $4,000 a year for Medicare Advantage whereas I was paying less than half that for regular Medicare. When I asked her about the benefits, they were exactly the same and she had to buy a supplemental plan. I don’t have the money for a supplemental plan or drug coverage — Medicare does not cover the medication that is necessary for me to stay alive and functional — and doctors are so abysmal I have to pay for direct care at a cost of $1,080 a year plus $150 a month for my thyroid medication.
I understood that (as usual) ‘Medicare Advantage’ was a gift to private insurers and therefore avoided it for a decade, but when I found a non-profit insurer that offered it I decided that might be acceptable because there should be no reason to take advantage of this ability to drive up income. Perhaps that was naive, but a second dimension to my concern was whether MA was structured such that such cost-inflation was unavoidable and that it might result in more rapid depletion of the Medicare trust fund (a worthy goal for those who would like to see Medicare die completely).
Confessions of a MAGA [Microsoft-Apple-Google-Amazon +( MIC + Obamacare Healthcare/Big Pharma)] Democrat.
Who did anyone think was paying for those recent multi million dollar political campaigns? Even when your heart and your votes were exclusively with the Trump like populists, you still made enormous book for your own portfolio on the fraud, systemic corruption, and organized con game that is Washington, DC big government. Whether it was in the Medicare plus shenanigans, the inexplicable Ukrainian war funding, our open borders, or the fashionable nonsense of the various climate change schemes, the investor class (a.k.a. Top 10% of US households) has always won out. ALWAYS!
Posting as much does not make it right. It does, however, make it less of a secret.
The vast majority of all ‘insurance’ is a fear-based ruse. Medical insurance is one of the worst offenders. Save your money and invest it. Don’t give in to parasites.