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health insurance
Dems Warn of 'Rampant' Medicare Advantage Abuses as Trump's GOP Aims to Boost For-Profit Plans
"Many of these plans are a maze of prior authorization word salad designed to deny seniors the coverage they're already paying for," said Sen. Ron Wyden.
Oct 30, 2024
A trio of leading congressional Democrats expressed alarm Wednesday about increasingly widespread abuses and care denials by for-profit Medicare Advantage insurers as allies of GOP presidential nominee Donald Trump aim to massively expand the for-profit program.
"We are writing to express our concerns on ongoing problems with Medicare Advantage (MA) that seem to be getting worse," Sen. Ron Wyden (D-Ore.), Rep. Frank Pallone Jr. (D-N.J.), and Rep. Richard Neal (D-Mass.) wrote in a letter to Chiquita Brooks-LaSure, administrator of the Centers for Medicare and Medicaid Services (CMS).
"We are concerned that in many instances MA plans are failing to deliver, compromising timely access to care, and undermining the ability of seniors and Americans with disabilities to purchase the coverage that’s right for them," the Democratic lawmakers continued. "We continue to hear alarming reports from seniors and their families, beneficiary advocates, and healthcare providers that MA plans are falling short, and finding a good plan is too difficult."
Wyden, Pallone, and Neal pointed specifically to MA plans' growing use of prior authorization, a complex, barrier-ridden process whereby doctors must demonstrate a proposed treatment is medically necessary before the insurer will cover it.
The process is notorious for harming patients—sometimes fatally—but 99% of MA enrollees are required to obtain prior authorization for at least some medical services, according to the health policy research group KFF.
"Overuse of prior authorization is not only harmful to patients, it hinders healthcare providers' ability to offer best-in-class service," the congressional Democrats wrote, pointing to MA plans' increasing use of artificial intelligence-backed algorithms to decide whether to accept or deny patients' coverage claims.
The lawmakers also voiced concerns about MA plans' deceptive marketing practices—which are particularly dangerous to people with disabilities, as they could potentially be duped into enrolling in an MA plan that doesn't meet their health needs.
"We call on CMS to use every regulatory, oversight, and enforcement tool at the agency's disposal to rein in rampant misuse of prior authorization, simplify the experience of choosing a Medicare plan, and put an end to rampant marketing abuses," the lawmakers wrote.
The Democrats' call for a crackdown on MA abuses stands in stark contrast to a plan put forth by Project 2025, which has proposed making Medicare Advantage the default enrollment option for the nation's seniors—a change that one critic said would mean "destroying Medicare as we know it" while providing a huge boon to private insurance companies.
Though Trump has attempted to distance himself from Project 2025, some 140 people who served in his first administration helped craft the far-right agenda, and one architect of the proposals said earlier this year that the Republican nominee is "very supportive of what we do."
The Guardian's Jessica Glenza reported this past weekend that "one of Republicans' only healthcare policy specifics involves further privatizing" Medicare by boosting Medicare Advantage, privately run plans that have proven significantly more costly than traditional Medicare without obvious improvements in quality of care—leading some experts to call for the program's abolition.
Glenza noted that Project 2025's healthcare proposals were authored by Roger Severino, who previously served as Trump's director of the Office of Civil Rights at the U.S. Department of Health and Human Services.
Just over half of the Medicare-eligible population in the U.S. is currently enrolled in a Medicare Advantage plan, according to KFF.
The Medicare Payment Advisory Commission, a nonpartisan congressional agency, has estimated that the federal government will spend $83 billion more funding MA plans in 2024 than it would have paid to cover the same patients under traditional Medicare.
A recent analysis by the Center for American Progress (CAP) projected that "if making MA the default option for enrollees were to expand the proportion of Medicare beneficiaries in MA to 75%... wasteful spending could approach an eye-popping $2 trillion over 10 years."
"Project 2025 would put more control in the hands of profit-driven corporations by making MA the default enrollment option for Medicare beneficiaries," CAP concluded. "Corporations, not doctors or patients, would be able to control what care an even greater number of enrollees can and cannot receive, while enriching their bottom lines and threatening Medicare's future."
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'This Should Be a National Scandal': For-Profit Medicare Advantage Plans Using AI for Denials
"They're using AI to predict when to cut off payment for treatments," said one watchdog group. "We repeat, AI. Not a doctor."
Nov 03, 2023
As Medicare Advantage plans rely increasingly upon artificial intelligence to determine—and often deny—payment for patient care, a group of Democratic U.S. lawmakers on Friday urged Medicare's top official to strengthen oversight of AI and algorithmic tools used to make coverage determinations.
"In recent years, problems posed by prior authorization have been exacerbated by MA plans' increasing use of AI or algorithmic software to assist in their coverage determinations in certain care settings, including inpatient hospitals, skilled nursing facilities, and home health," 32 House Democrats led by Rep. Judy Chu (D-Calif.) wrote in a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Books LaSure.
"Advocates and the media report that the use of such software has led to coverage decisions that are more restrictive than allowed under traditional Medicare rules, as well as more frequent and repeated denials of care," the lawmakers wrote. "Absent prohibiting the use of AI/algorithmic tools outright, it is unclear how CMS is monitoring and evaluating MA plans' use of such tools in order ensure that plans comply with Medicare's rules and do not inappropriately create barriers to care."
The lawmakers are calling on CMS to take steps including, but not limited to:
- Requiring MA plans to report prior authorization data including reason for denial, by type of service, beneficiary characteristics (such as health conditions), and timeliness of prior authorization decisions;
- Comparing "guidance" generated by AI and algorithmic tools with actual MA coverage decisions;
- Assessing how and to what extent initial prior-authorized AI determinations for services are adjusted to account for unanticipated changes in a patients' condition;
- Requiring attestation from MA plans and contractors that their coverage guidelines are not more restrictive than traditional Medicare; and
- Determining whether MA plans are inappropriately using race/other factors in these algorithms.
MA plans are not part of Medicare. They are a private health insurance "scam" created by a GOP-controlled Congress and signed into law 20 years ago by then-President George W. Bush "as a way of routing hundreds of billions of taxpayer dollars into the pockets of for-profit insurance companies," according to frequent Common Dreams opinion contributor Thom Hartmann.
A report published last month by Physicians for a National Health Program revealed that MA plans are overcharging U.S. taxpayers by up to $140 billion per year, enough to completely eliminate Medicare Part B premiums or fully fund Medicare's prescription drug program.
The lawmakers' letter is endorsed by advocacy groups including the Center for Medicare Advocacy, Public Citizen, Social Security Works, Center for Health and Democracy, and Business Leaders for Health Care Transformation.
"The use of AI by Medicare Advantage insurers to deny needed care to seniors and people with disabilities represents the most recent and dangerous step by greedy companies focused on profit instead of patients," Public Citizen executive vice president Lisa Gilbert said in a statement.
"Now is the time for CMS to crack down on companies that are using AI and other mechanisms to deny care that would be covered if the enrollee were covered by traditional Medicare," Gilbert added. "Understanding how Medicare Advantage insurers are using AI to deny needed care and holding bad actors accountable are crucial steps to protecting seniors and the Medicare program."
Last year, a U.S. Senate probe found that insurance companies and other brokers are "running amok" with "fraudsters and scam artists" making false or misleading claims to dupe senior citizens into purchasing MA plans.
Progressive lawmakers have also criticized President Joe Biden for delaying promised curbs on Medicare Advantage plans amid heavy insurance industry lobbying.
Earlier this year, Reps. Mark Pocan (D-Wis.)—one of the 32 lawmakers who signed the letter to Brooks LaSure—Ro Khanna (D-Calif.), and Jan Schakowsky reintroduced a bill to change the official name of MA to "alternative private health plan" to make clear that such coverage is offered by for-profit companies.
"The scheme is called Medicare Advantage," Pocan and Khanna explained. "But in reality, so-called 'Medicare Advantage' is neither Medicare nor an advantage."
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Whipping Egg-Whips: Retirees Are Winning Battles Against Medicare Advantage
In a country inundated with ads falsely praising the benefits of MA plans, it is amazing that grassroots organizations have cut through the gibberish, exposed the lies, and are fighting to keep their traditional Medicare with promised supplementary coverage.
Aug 25, 2023
An Egg-Whip sounds like a festive, holiday drink or a merengue dessert. It is anything but a delightful treat.
Egg-Whip is the healthcare industry’s name for Employer Group Waiver Plans (EGWP), a provision for privatization of employer-based, retiree Medicare benefits that was written into the Medicare Modernization Act (MMA) of 2003. That law, which House Energy and Commerce Chair Billy Tauzin twisted arms to pass, added a drug plan to Medicare, not by including drugs as covered Medicare benefits, but by compelling seniors to purchase private drug plans. Big Pharma gained a massive influx of government money into its coffers and rewarded Tauzin with a $2-million-a-year job.
That’s what we could see on the surface. Who knew then that hidden in the MMA law was further privatization of Medicare beyond this privatized, publicly-subsidized drug plan known as Medicare Part D.
The Egg-Whip allows employers that have committed to provide health benefits for retirees to force those seniors, without their consent, into private, for-profit Medicare Advantage plans that impose conditions on the promised benefits.
This other provision in the MMA, the Egg-Whip, allows employers that have committed to provide health benefits for retirees to force those seniors, without their consent, into private, for-profit Medicare Advantage (MA) plans that impose conditions on the promised benefits.
These private employer-based Egg-Whip MA plans are exempt from requirements that individual Medicare Advantage plans must meet. The MA Egg-Whip plans “can set their own enrollment deadlines, send members information without prior CMS approval for accuracy, and follow weaker requirements for provider networks, among other things,” according to Susan Jaffe of Kaiser Health News.
Chris Maikels of Mercer Marketplace, a retiree benefits company, claims that his clients have saved up to 50% by moving retirees into MA private plans. “Employers find Medicare Advantage [plans] appealing because they can drive significant savings,” he asserts.
For the retirees who are forced into Egg-Whips, the results are not so appealing. A private for-profit middleman is placed between the beneficiaries and their physicians. Medicare funds are funneled through these plans. The more the plans limit, delay, and deny care, the greater the profits. The beneficiaries’ interest in care is diametrically opposed to the pecuniary interests of the insurance companies, such as Humana, United Health Care, or Aetna, through which their Medicare benefits are now funneled. Physicians’ decisions can be overruled by the money men who demand prior authorization. The best cancer centers and rehab facilities are off-limits. The network of approved providers may be limited to a geographic region. Doctors come and go from the network. The co-payments will escalate with the gravity of the illness.
Employers who seek the savings of private MA plans hide these detrimental characteristics of Egg-Whips by touting additional benefits like gym memberships, coverage for dental and eyeglasses, no co-pays on some procedures, and more. Those extra benefits are icing on the cake—but there’s no cake underneath.
In a country inundated with Medicare Advantage ads falsely praising the benefits of such plans, it is amazing that grassroots organizations of retirees have cut through the gibberish, exposed the lies, and are fighting to keep their traditional Medicare with promised supplementary coverage.
And they’re winning, too!
Retiree organizations in Vermont, New York, and Delaware have put thousands into motion as they rip down the curtains that have hidden Medicare Advantage from the nation’s understanding and righteous anger.
The Vermont State Employees Association (VSEA) effectively stopped Governor Phil Scott from moving state retirees to a private Medicare Advantage plan. State officials asserted that such a change would maintain the same level of coverage for retirees and save them an average of 20% on their premiums while saving money for the state of Vermont.
The Vermont State Employees Association knew better. Steve Howard, Executive Director of the VSEA, asserted that this was an end run around their rights, under the collective bargaining agreement, to have the same health benefits as the active state employees. “We’re gonna fight with everything we have,” Howard said. “If we have to go to court, we’ll go to court.” We refuse to agree to “privatize this benefit out to an industry that is renowned for denying healthcare services to people when they need it the most,” said Howard.
The VSEA learned about the threat to their retiree health benefits in September of 2022. They organized a massive resistance. By May of 2023 they had defeated Medicare Advantage. Howard tells the story at minute marker 30:40 on this radio program, To Heal D.C.
The New York City Organization of Public Service Retirees has been fighting for two years to keep from getting egg-whipped. They too are winning. It’s a David and Goliath story, and David and his slingshot, amazingly, are hanging in there, creating a spirited, fighting camaraderie as they do it.
Former New York City Mayor Bill de Blasio initiated the move to place the New York City retirees into a Medicare Advantage Egg-Whip. That effort was continued by current Mayor Eric Adams, who claims that the city would save $600 million a year and that the retirees would be better off than they are now with their current plan based on traditional Medicare.
Mayor Adams, sadly, in conjunction with some of the unions, signed a deal with Aetna to move the city retirees into an Egg-Whip MA Aetna plan, despite the fact that Aetna’s MA plans, in just one year, imposed prior authorization restrictions on nearly 3 million people and denied the claims of 400,000.
On August 11, 2023, Judge Lyle Frank granted the request of the retirees and ruled that the city could not place the 250,000 retirees into Medicare Advantage against their will.
“This is now the third time in the last two years that courts have had to step in and stop the city from violating retirees’ healthcare rights,” said Marianne Pizzitola, president of the New York City Organization of Public Service Retirees. “We once again call on the city and the Municipal Labor Committee to end their ruthless and unlawful campaign to deprive retired municipal workers of the healthcare benefits they earned.”
Retirees have waged battle through countless demonstrations and actions that have brought the grassroots into motion like never before. NYC retirees are currently urging the City Council to pass legislation that clearly makes permanent their right to their current health benefit plan. They have persuaded 17 council members to sign on to the legislation and are working to get that number to 34 to give them a veto-proof majority. Uphill battles don’t faze them. They continue with a feisty energy as Mayor Adams announces that he will once again appeal the judge’s decision.
A similar battle is unfolding in the state of Delaware. Since August of 2022, Retirees Investing in Social Equity (RISE Delaware) has been organizing to block a proposal to place them in a Medicare Advantage Egg-Whip plan run by Highmark. RISE Delaware, initiated by former State of Delaware Representative John Kowalko and New Castle County Councilwoman Lisa Diller, has generated thousands of emails and letters to officials and brought litigation that has succeeded, so far, in stopping the state from implementing the change to an Egg-Whip MA plan.
In an open letter from RISE Delaware, the organization responds to the barrage of false information. “The fact that we would not accept the move into Medicare Advantage and took the State of Delaware to court to stop it is an indication of how serious we are about keeping the benefits promised to us.”
They go on to state their solidarity with future retirees:
But we also want a commitment to current employees that healthcare benefits will be there for them too. We know that employees are often unaware of how much they will need their healthcare benefits as they age. We know that high deductible healthcare plans sound great when you don’t need them. But it is when you can’t outrun the health problems that you need those healthcare benefits. So, we are watching as you “survey” state employees about the “modernization” of their healthcare benefits. We know that benefits choice is often code for benefits reduction even if employees are not yet aware of that fact.
RISE Delaware retirees are contacting the members of a state benefits committee that advises the legislature asking committee members to vote “to put a stake through the heart of Medicare Advantage so it can never come back to haunt us. If they don’t, MA will be like a dormant venomous snake in winter—it will come back to strike in spring.”
Retiree organizations in Vermont, New York, and Delaware have put thousands into motion as they rip down the curtains that have hidden Medicare Advantage from the nation’s understanding and righteous anger. They are fighting back, clearing the fog, educating their colleagues and the public to the dangers of Egg-Whips and Medicare Advantage, winning battle after battle to the consternation of the Medicare Advantage companies whose cash cow is suddenly exposed and threatened.
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