Private Insurers Bilked Taxpayers Out of More than a Half-Trillion Dollars Between 2007 and 2023

https://www.citizen.org/news/private-insurers-bilked-taxpayers-out-of-
more-than-a-half-trillion-dollars-between-2007-and-2023/

WASHINGTON, D.C. — According to a new analysis featured today in JAMA 
Internal Medicine, privatized Medicare Advantage plans have raised 
Medicare’s costs by $612 billion since 2007, including $82 billion last 
year alone.

The authors — physicians affiliated with Harvard Medical School, the City 
University of New York’s Hunter College, and the Public Citizen Health 
Research Group — analyzed data from Congress’ official Medicare Payment 
Advisory Commission (MedPAC), Medicare’s Trustees, and other sources to 
estimate how much Medicare would have saved if enrollees in privatized 
Medicare plans had instead remained in traditional Medicare, and how much 
Medicare Advantage plans used for their administrative overhead, from 
2007-2023.

The researchers found that the insurers pocketed 97% — $592 billion — of 
Medicare’s overpayments for their overhead and profits, which consume 14% 
of their total revenues, seven-fold more than the 2% overhead in the 
traditional Medicare program.

The authors call privatized Medicare a “failed experiment” that should be 
abolished, noting that the savings should be used to expand benefits and 
lower out-of-pocket costs for all Medicare beneficiaries.

“Medicare Advantage is a bad deal for taxpayers,” said lead author Dr. 
Adam Gaffney, a Harvard pulmonary and critical care physician practicing 
at the Cambridge Health Alliance. “Money that could be used to eliminate 
all copayments or shore up Medicare’s Trust Fund is instead lining 
insurers’ pockets. And the private insurers keep Medicare Advantage 
enrollees from getting needed care by erecting bureaucratic hurdles like 
prior authorizations and payment denials.”

The JAMA IM article, “Less Care at Higher Cost — The Medicare Advantage 
Paradox,” details how private insurers have exploited loopholes in 
Medicare’s complex payment rules for decades to extract overpayments. The 
federal government pays insurance companies a lump sum for each patient 
its Medicare Advantage plans sign up, with the amount of the lump sum 
based on enrollees’ “risk scores,” which the government calculates from 
diagnosis codes that the plans submit. The risk scores are meant to 
predict how much care enrollees will need. But research has repeatedly 
shown that the private plans game the system by cherry-picking the 
healthiest seniors to enroll, and then exaggerating how sick they are by 
so-called “upcoding,” i.e. padding enrollees’ medical charts with long 
lists of diagnosis codes that do not require specific treatment, jacking-
up the risk score and hence the government’s lump-sum payment to the plan.

According to the JAMA IM article, privatized Medicare plans often refuse 
to cover providers that high-cost patients need, such as specialized 
cancer hospitals or psychiatrists; restrict access to drugs and 
treatments; and pressure patients’ doctors to curtail expensive care. As a 
result, the privatized plans spend, on average, 9% less on medical 
services (including the extra benefits they promise) than traditional 
Medicare spends for comparable patients.

“Medicare Advantage plans have, in effect, stolen hundreds of billions 
from taxpayers,” says David Himmelstein, a study co-author who is a 
Distinguished Professor at CUNY’s Hunter College, a lecturer at Harvard 
Medical School, and a Research Associate at Public Citizen. “And the 
private plans’ schemes also raise seniors’ Part B Medicare premiums. Even 
seniors who don’t choose to enroll in Medicare Advantage are subsidizing 
the private plans’ profits.”


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November 5, 2024 - Congratulations President Donald Trump.  We look 
forward to America being great again.

We live in a time where intelligent people are being silenced so that 
stupid people won't be offended.

Every day is an IQ test. Some pass, some, not so much.

Thank you for cleaning up the disasters of the 2008-2017, 2020-2024 Obama 
/ Biden / Harris fiascos, President Trump.

Under Barack Obama's leadership, the United States of America became the 
The World According To Garp.  Obama sold out heterosexuals for Hollywood 
queer liberal democrat donors.