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Medicare News
Inequities for Poor, Minorities in Medicare’s
Private Health Plans, Report Says
Medicare Rights Center says payments to private
health plans don’t make sense
Sept. 10, 2007 - Low-income people enrolled in
Medicare private fee-for-service plans pay more for their health care in
some counties than people enrolled in the same plans in neighboring,
more affluent counties, according to a new Medicare Rights Center
report.
“Certain members of Congress and the insurance
industry lobby have been working overtime to sell the argument that
overpaying insurers is in the best interest of poor and minority
Americans. But it is a misleading, untruthful strategy to keep the
overpayments to Medicare private health plans flowing,” says Robert M.
Hayes, president of the Medicare Rights Center, a national consumer
service organization.
“Our county-to-county analysis found that there is
no correlation between excessive federal subsidies and lower health care
costs or richer benefits in minority and low-income communities,” said
Mr. Hayes.
In Medicare Private Health Plans vs. Medicare
Savings Programs, the Medicare Rights Center cites examples where
Medicare private fee-for-service plans in affluent counties receive
greater federal subsidies per enrollee than those in nearby poorer
counties where more minorities reside.
The consumer group also found that the
out-of-pocket costs are greater for people enrolled in plans in the
poorer communities, belying assertions by the Administration that excess
payments to private insurers are the best route to improve health
coverage for poor people with Medicare.
The Medicare Rights Center report compares Medicare
private fee-for-service plan premiums and benefit packages for eight
counties in four states with income, race and ethnicity data from the
U.S. Census Bureau. The report indicates how much the federal subsidies
to private health plans in each of these counties exceed health care
costs under Original Medicare.
In Clermont County, a relatively affluent county in
Ohio, there is no monthly premium for one private health plan yet the
monthly premium is $69 for the same plan in a neighboring county with
almost double the proportion of families living in poverty and a high
percentage of African American residents. An analysis of health plans
in Utah found that one plan charges no monthly premium in a relatively
affluent county, but in a poorer county, the plan members pay 27 percent
more for an average six-day hospital stay than plan members in the
affluent county.
“The best way for Congress to lower health costs
for low-income Americans with Medicare is to improve access to the
federal and state programs, the Medicare Savings Programs, that directly
lower consumer costs,” said Mr. Hayes.
“By aligning the income and asset criteria for
these programs with that of the Medicare drug benefit subsidy, more
people in more places would get the help that these programs were
intended to provide to the poor.”
The Medicare Savings Programs, targeted to
low-income people with Medicare, help pay the Medicare monthly Part B
premium, deductibles and coinsurance. Currently, the income criterion
for enrollment in Medicare Savings Programs is 135 percent of the
federal poverty level but it is 150 percent of the federal poverty level
for “Extra Help,” the federal subsidy for the Medicare drug benefit
available through private plans.
Asset limits are $4,000 for individuals and $6,000
for couples for Medicare Savings Programs but more generous for Extra
Help at $11,207 for individuals and $23,410 for couples. The Medicare
Savings Program known as the Qualified Medicare Beneficiary Program (QMB)
covers all cost sharing for medical services but there is no private
health plan that covers all costs.
As Congress debates whether to cut overpayments to
Medicare private health plans, the insurance industry lobby and some
members of Congress justify them by claiming overpayments help lower the
out-of-pocket costs for minorities and low-income people with Medicare.
The federal government pays insurance companies an
average of 12 percent more for each insured member -- 19 percent more
for people in private-fee-for service plans -- than what it would cost
Original Medicare to cover these same individuals.
The Medicare Rights Center’s report Medicare
Private Health Plans vs. Medicare Savings Programs is available at
http://www.medicarerights.org/MA_vs_MSP.pdf.
Medicare Rights Center (MRC) says it is the largest
independent source of health care information and assistance in the
United States for people with Medicare. Founded in 1989, MRC helps older
adults and people with disabilities get good, affordable health care.
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