Medicare Advantage is a federal program that pays private companies to manage health insurance for seniors and people with certain disabilities. It originated in the early 2000s with the goal of saving money while improving health care delivery, but soon corporate profiteers saw a golden opportunity in the “untapped market” of Medicare beneficiaries. Since then, private insurers have slowly but steadily eroded the foundations of Traditional Medicare, undermining a popular and successful program that many Americans have relied on since 1965.
Medicare Advantage plans are appealing—they generally include coverage for hearing, dental, and vision care, which of course we all need, and often prescription drug coverage as well. Because of generous federal payments, the premiums often cost less than Traditional Medicare with a supplemental plan. The private companies that offer MA plans deluge Medicare beneficiaries with advertising in print and online, capitalizing on people’s recognition and generally positive views of Medicare.
But despite their name, MA plans are private insurance dressed up as Medicare and paid for with taxpayer funds. The companies that offer these plans—both for-profit and nonprofit—have found ways to boost their revenue by limiting patients’ choices in narrow networks, denying or delaying medically necessary care, subtly marketing to healthier seniors, and inflating the medical conditions of patients to increase billing reimbursements through “upcoding,” to the tune of tens of billions of dollars. Researchers estimate that overpayments to Medicare Advantage now top 20%, or $75 billion per year. Medicare Advantage plans cost taxpayers more than Traditional Medicare, contributing to the draining of the Medicare Trust Fund.
Losing Medicare
Medicare Advantage privatizes Medicare and funnels federal money to private entities, many of which are for-profit corporations. Even nonprofits, like Martin’s Point in Maine, have been shown to use upcoding and other harmful practices to boost revenue.
Today just over 50% of Medicare beneficiaries are enrolled in MA plans, up from 19% in 2007, according to analysis by the Kaiser Family Foundation, and that number is expected to grow. In addition, enrollment in MA is concentrated in plans offered by just a few companies; as of 2023, UnitedHealthcare and Humana account for 47% of MA enrollees. At some point, Traditional Medicare will not be viable because so many seniors will be in Medicare Advantage plans, making private insurance entities even more powerful and difficult to hold to account.
Only Traditional Medicare is Medicare. If we want this program to survive, and if we want to build on its success to include all Americans, we must protect it from corporate greed.
Patients paying the price
While MA plans, with their attractive low or even no-cost premiums, make sense for some seniors initially, there are downsides to be considered before making this choice. In MA plans, treatment decisions made by you and your doctor may be denied by the plan, including through automatic denials made in seconds using artificial intelligence. You may have difficulty purchasing Medigap coverage if you decide to re-enroll in Traditional Medicare. Enrollees are forced to stay within limited networks of health care providers, which can be especially problematic in rural places like much of Maine, where access to practitioners may already be limited.
Many people have come forward to share their stories of how MA has made it difficult or impossible (stories start at about minute 6) to get the care they need in a timely way, sometimes with heartbreaking, catastrophic results. And while some people choose MA, others are enrolled automatically or as part of benefits negotiations for retirees.
The toll on health care workers
Burnout is a growing problem for health care workers, and one factor is the excessive paperwork involved with private insurance to maximize billing and for pre-authorizations and claim denials. Related to burnout, moral injury in health care workers is increasingly recognized, resulting from loss of autonomy in decision-making about patient care, pressure to see more patients to boost the bottom line, under-staffing and other practices that force health care workers to choose between providing the care they were trained for and want to give and meeting the increasing business demands placed on them. Medicare Advantage exacerbates these problems, while Traditional Medicare does not require pre-authorizations or deny claims for most medically necessary services.
There is a better way
Traditional Medicare has served Americans well for 58 years, with low administrative overhead (3-5%) and lower costs to taxpayers than Medicare Advantage.
The federal Medicare for All Act of 2023 (H.R. 3421) would build on and expand Traditional Medicare to guarantee comprehensive medical care to every person in the United States. This includes primary care, vision, dental, prescription drugs, mental health, substance abuse, long-term care, reproductive care, and more. These added benefits would be funded by reining in corporate profiteering, reducing administrative waste, negotiating drug prices, and simplifying how health care is managed and financed.
Only Traditional Medicare is Medicare. If we want this program to survive, and if we want to build on its success to include all Americans, we must protect it from corporate greed.
Learn more
Our Payments, Their Profits: Quantifying Overpayments in the Medicare Advantage Program (2023)
Physicians for a National Health Program
Segment with Don Berwick, former head of the Center for Medicare and Medicaid Services, outlining the history of Medicare Advantage and why we need Improved Medicare for All. (2023)
(Part of a Be A Hero organizing call. Berwick segment starts at about minute 13:00.)
Medicare Advantage: A Policy Primer
Commonwealth Fund
May 2022
Protect Medicare
Physicians for a National Health Program
Kitchen Table Campaign: Medicare Disadvantage
Physicians for a National Health Program
Martin’s Point fraud settlement highlights shortcomings in Medicare Advantage program
Portland Press Herald
August 2023
Martin’s Point case shows need for Medicare for All
Letter to the editor in the PPH by Karen Foster, Maine AllCare board chair
August 2023
The problem with upcoding under Medicare Advantage
Letter to the editor at centralmaine.com by Dr. Julie Keller Pease, Maine AllCare board member
August 2023
How journalists see Medicare Advantage
May 2023
Moral injury in modern medicine and how to heal health care workers
On Point, WBUR
April 2023
Last updated 12/13/23