Center for Medicare Advocacy

Advancing Access to Medicare and Healthcare

Medicare Reform

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Table Of Contents
  1. Medicare Platform: Principles to Improve Medicare for All Beneficiaries Now and In the Future
  2. Medicare IS Under Attack, and In Danger of "Withering on the Vine"
  3. Medicare is a Success: Preserving a Sound Program for Future Generations
  4. Private Medicare: Too Much For Taxpayers, Too Little For Beneficiaries
  5. More Information
  6. Articles & Updates

Medicare Platform: Principles to Improve Medicare for All Beneficiaries Now and In the Future

  1. Improve Consumer Protections and Quality Coverage
  • Cap out-of-pocket costs in traditional Medicare[1]
  • Require Medigap plans to be available to everyone in traditional Medicare, regardless of pre-existing conditions and age
  • Ensure parity between Medicare Advantage (MA) and traditional Medicare
    • Ensure all benefits in Medicare Advantage are also available in traditional Medicare, such as the waiver of 3-day prior hospital stay requirement for skilled nursing home care, coverage for home health aides, certain oral health, vision, and audiology services
    • Ensure payment in traditional Medicare is at least as much per enrollee as in Medicare Advantage[2]
  • Simplify enrollment in traditional Medicare, Part D and Medigap, and ease transitions from other insurances to Medicare
  • Improve consumer protections in Medicare Advantage
    • Standardize benefit packages[3]
    • Strengthen plan oversight, including ensuring plans contract with enough providers who are accessible to plan enrollees (network adequacy)[4]
    • Strengthen marketing protections[5]
  • Ensure parity between mental health and physical health coverage
  • Ensure the Medicare appeals system is cost-effective and fair for beneficiaries
    • Ensure access to timely, meaningful decision-making, and written determinations at all levels of appeal 
    • Add a meaningful appeals process for hospice coverage[6]

2. Reduce Ongoing Barriers to Care  

  • Eliminate the harm of so-called hospital “Observation Status” when a person is actually in the hospital
    • Eliminate the 3-day prior inpatient hospitalization requirement for skilled nursing facility coverage or, at least, count all time in the hospital towards the 3-day prior hospital requirement
  • Ensure access to home health coverage is actually available for all beneficiaries who meet coverage criteria; ensure access to legally authorized home health aides; resolve conflicts between payment models and coverage laws[7]
  • Ensure access to quality skilled nursing facility care
    • Require adequate staffing ratios, provider payments subject to a medical loss ratio, and adequate oversight and enforcement
  • Ensure beneficiaries with longer-term, chronic, and/or debilitating conditions have full access to skilled nursing, therapy and related care needed to maintain their conditions or slow decline, as is required by law

3. Improve Traditional Medicare  

  • Ensure traditional Medicare is comprehensive, simple to navigate, and affordable
  • Add oral health, audiology, and vision coverage for all beneficiaries in traditional Medicare
  • Increase low-income protections and reduce cost-sharing
  • Add coverage for long-term care
  • As in HR 3,[8] ensure savings achieved through drug negotiations, or by other means, are reinvested into the Medicare program

Improve and simplify Medicare. Don’t privatize or cut it. 
Build it better. Then expand access for generations to come.

[1] In 2016, the average person with Medicare coverage spent $5,460 out of their own pocket for health care (Kaiser Family Foundation, 2019). 

[2] On average, MA plans are still being overpaid due, in part, to manipulation of risk adjusted payment and a broken quality bonus payment system; see, e.g., https://medicareadvocacy.org/medicare-advantage-continues-to-drive-up-medicare-costs,  https://medicareadvocacy.org/support-traditional-medicare-by-leveling-the-playing-field-with-medicare-advantage/, http://www.medpac.gov/docs/default-source/reports/jun19_ch8_medpac_reporttocongress_sec.pdf. 

[3] See, e.g., https://medicareadvocacy.org/center-comments-on-medicare-advantage-and-part-d-transformation-ideas/.

[4] See, e.g., discussion of reversing MA network adequacy changes in recent final Part C & D rule at: https://medicareadvocacy.org/final-rule-for-medicare-parts-c-and-d-includes-weakened-standards-for-medicare-advantage-networks/.

[5] See, comments to proposed Part C & D rule at: https://medicareadvocacy.org/wp-content/uploads/2020/04/CMA-CD-Comments-2020.pdf.

[6] For example, establish an expedited appeals process for hospice coverage issues similar to one currently in regulations for untimely discharges from skilled nursing facilities, home health and hospice – see 42 CFR §405.1200, et seq.

[7] For example, consider lifting or expanding the current statutory cap on outlier payments (claimed for individuals with significant resource needs) from 2.5% of total Medicare home health payments, and 10% of expenditures to any singular home health agency. These caps inappropriately limit access to necessary services under the guise of controlling fraud.

[8] H.R.3 – Elijah E. Cummings Lower Drug Costs Now Act (passed House of Representatives 12/12/19).

Medicare IS Under Attack, and In Danger of “Withering on the Vine“

In 1995 Newt Gingrich predicted that privatization efforts would lead Medicare to wither on the vine. He said it was unwise to get rid of Medicare right away, but envisioned a time when it would no longer exist because beneficiaries would move to private insurance plans.

Well … that’s what’s happening. Not just by happenstance, but rather according to a determined, strategic plan. The plan has included the following:

  1. Government subsidies to private plans, renamed “Medicare Advantage,” ranging from 14% –  2% above traditional Medicare per-beneficiary costs;
  2. Additional benefits added to private Medicare Advantage, benefits that weren’t added, and aren’t allowed, in  traditional Medicare;
  3. Part D prescription drug coverage wrapped into Medicare Advantage, but not into traditional Medicare;
  4. Increases in traditional Medicare Part B premiums, especially for the middle class;
  5. Limits on access to Medigap insurance to supplement traditional Medicare and on benefits for those who can obtain a Medigap policy.

It didn’t take a crystal ball. It took a vision, planning and persistence.

The Center for Medicare Advocacy also has vision, planning and persistence. We do all we can to keep Medicare focused on the needs of older and disabled people, not the insurance industry. We speak out with expertise and with  the stories of real people.

With your support, we’ll keep insisting that Medicare is fully present for the families that rely on it – now and in the future. We’re ready to keep Medicare from withering on the vine.

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Medicare is a Success: Preserving a Sound Program for Future Generations

The Medicare program is a success story. It was designed and enacted in 1965 as a social insurance program because private companies failed to insure older people. It was intended to provide basic coverage through one health insurance system, with a defined set of benefits. Reforms to Medicare should honor and maintain its core values to ensure its continued success for future generations.

As stated by Nancy-Ann DeParle, a former Administrator of the Health Care Financing Administration (HCFA, now CMS):

Few programs in the history of the United States have brought as much benefit to society as Medicare. Since its enactment in 1965, Medicare has provided access to quality health care for those Americans least likely to be attractive to private insurers – those over age 65, disabled, or with end stage renal disease. Medicare has also prevented many Americans from slipping into poverty. The elderly’s poverty rate has declined dramatically since Medicare was enacted – from 29 percent in 1966 to 10.5 percent in 1995. Medicare also provides security across generations: it has given American families assurance that they will not have to bear the full burden of health care costs of their elderly or disabled parents or relatives at the expense of their young families. (Preface, A Profile of Medicare, May 1998.)

Core Values That Should be Addressed in Any Medicare Reform Plan

  • Medicare should continue to be a national health insurance program, not a set of independent private plans and payment options.
  • Medicare should include a mandatory, secure set of defined benefits.
  • Medicare should continue to provide one community of interests among the healthy and frail, rich and poor. It should not separate beneficiaries into separate groups with distinct and varying interests by creating multiple cost-sharing levels, benefit options, and delivery systems that differ depending upon the ability to pay or an individual’s health.
  • Medicare should provide equal access to appropriate and high quality health services for all beneficiaries, including those with chronic, long-term, and mental health conditions.
  • Private Medicare plans should be carefully monitored by CMS to ensure they provide full Medicare coverage and rights to their enrollees.
  • Medicare should provide an accessible, meaningful appeals process that guarantees due process to all beneficiaries.  Medicare coverage decision-makers, at all levels, should be independent from CMS and should be required to make coverage decisions based on the law and regulations.

Conclusion

The public should listen carefully to the many proposals being considered that would dramatically change Medicare under the guise of reform, modernization, and deficit reduction.  Many of these proposals would abandon Medicare’s core values and increase expensive privatization. Medicare can be strengthened and preserved for future generations if an informed public demands it.

Private Medicare: Too Much For Taxpayers, Too Little For Beneficiaries

When Medicare was created in 1965 over 50% of everyone 65 or older had no health insurance. Private insurance failed to meet their needs. Medicare, on the other hand, is a success. It increased the number of insured older adults to 95%. In 1972 Medicare coverage was extended to people with significant disabilities. But Medicare’s success in providing access to health care for millions of people is in danger. Ironically, the threat comes from private insurance plans. Funded by windfall subsidies from taxpayer dollars, privatization is jeopardizing the cost-effective, dependable Medicare program.

Since 2003 the number and costs of private Medicare plans have increased exponentially as a result of the design of Medicare Part D and “Medicare Advantage”. Unlike plans to privatize Social Security, which were debated and largely rejected by lay people and professionals alike, the privatization of Medicare is well underway and has occurred largely without public knowledge or discussion. Medicare privatization and the billions of dollars being spent to subsidize private plans threaten the future of Medicare and the health and economic security the Medicare public program has provided for America’s older and disabled people and their families.

Medicare wasn’t broken, but because of the ever-increasing private Medicare options, it is breaking. The myriad private plans are creating confusion and barriers to care for real people. The Center for Medicare Advocacy is contacted everyday by people who were inappropriately marketed to; people who did not understand what they were getting into, people who have been unable to get the health care services they need from their Medicare Advantage (MA) plan, and people who are “locked into” their MA plan. Further, the Center gets calls for help from people who thought they had MA “on top of” their regular Medicare and/or Medigap and are surprised to find out that is not true when the service or provider they need is not covered by their MA plan.

Medicare privatization costs taxpayers approximately billions of dollars every year, while it hurts many people with Medicare and strangles the traditional Medicare program. Consider these stories from just a few of the Center’s clients:

  • Mrs. P is a 67 year old woman who was diagnosed with ALS three years ago. She contacted the Center for help because her private Medicare plan cut off all her home care, saying she was “stable” and no longer needed home health services. CMS said the coverage decision was up to the plan and would not intervene. The Center for Medicare Advocacy filed a case in federal court seeking continued coverage for Mrs. P. The Court ordered Medicare to cover Mrs. P.’s home care; she was therefore able to stay at home with the health care she needs. Without Medicare coverage and this necessary home care, Mrs. P. would have been forced to enter a nursing home.
  • A Congressman called the Center to obtain help for a constituent who he met at a local town hall meeting. Mr. B and his wife were members of a Medicare Advantage plan in Connecticut. They went to Florida for vacation where Mrs. B fell and was sent to the hospital to treat her injuries. Tests at the hospital showed that, unbeknownst to Mrs. B, she had a brain tumor. Doctors determined she needed treatment immediately. Because Mr. B is frail himself and the couple’s daughter in Utah is a nurse, they decided to go there for Mrs. B’s chemotherapy. Upon receiving the chemotherapy, however, Mrs. B had a life threatening reaction that resulted in her being in the Intensive Care Unit for days. She ultimately died. The hospital bill came to $100,000 and was completely denied by the Medicare Advantage plan because Mrs. B was “out of network”. The Center appealed. Finally, after an administrative hearing most of the bill was paid in recognition that the care received after Mrs. B’s reaction to treatment was emergency services.
  • Mrs. W called us with a Medicare Advantage (MA) problem. She went from a hospital to a nursing home and was being billed for $13,000 because the nursing home was out of her MA plan’s network. She had been told by both the hospital and nursing home staff that original Medicare would cover her nursing home stay, even though she had an MA plan. This is not true. The beneficiary herself is extremely confused and was unable to answer any of the Center attorney’s questions.
  • The Center has a case pending for an individual who is in an MA plan in Connecticut and went out of network for doctor’s services. He was billed $5,000 for these services. This individual is functionally illiterate and did not understand that he could only see providers in the plan’s network when he signed up for the MA plan. He says he did not receive any booklets or anything in writing from the MA plan regarding the network’s providers. Even if he did, he likely wouldn’t have been able to read the information or comprehend the concept of a network.
  • A Center attorney received a call from a woman with significant MA concerns. She and her husband were visited by an MA marketing representative for a Private Fee For Service Plan (PFFS). He came door to door and was absolutely not invited. The woman told our attorney that both she and her husband suffer from brain injuries and previous strokes and that they were both distressed when the agent came into their home. He told them that he wanted to talk to them about a “new kind of Medicare.” She said that she listened but did not understand and that he gave too much information too fast. She said she filled out the form he had and said yes to all of his questions just to get him to leave her home; this all happened in January, 2007.

When the woman called the marketing representative to disenroll the representative told her to just send a letter to the plan and that would effectuate disenrollment. She did so in January but had not been disenrolled when she contacted the Center six months later. During that time, she and her husband needed and received medical services, for which they were billed and sent to collection. The husband requires injections from an oncologist which cost $3000 each; he needed three during this period. Other services received during the period included doctors’ visits, a hospital CT scan, neurologist visits, and endocrinologist visits.

  • Mr. N, one of the Center’s clients had traditional Medicare along with a Medigap supplemental policy. He was approached by an MA plan while at his dialysis unit, which is now a marketing violation. He was told that the MA plan and the Medigap policy together would cover all his expenses. Mrs. N called the Center because they are now receiving bills for the balance of what the MA plan did not cover. When she contacted the Medigap representative, he told her that because she now is in an MA plan, the Medigap won’t cover the balance. Mrs. N then called the MA plan to disenroll because she is worse off than before joining the MA. They told her she couldn’t disenroll at this time.

The Center is working to retroactively disenroll Mr. N from the MA plan based upon the misinformation that he was given by the marketing representative. Hopefully, if the retroactive MA disenrollment is granted, the Medigap policy will provide retroactive coverage for the past bills.

  • A Center attorney received a call from the daughter of a beneficiary who speaks very little English. Apparently an agent from an MA plan in Hartford, CT came door-to-door without being invited (which is a marketing violation), visited this woman’s mother and got her to sign an application. The representative told the mother that everything would be “free”. The daughter called the plan and was able to get her mother disenrolled. But, Social Security is still deducting the monthly premium for the MA plan from her mother’s Social Security check so she called the Center to get help with the premium problems. Her mother needs the money.
  • The Center was contacted by the daughter of a woman who signed up for an MA plan. Apparently representatives from the MA plan called and asked if they could come to the mother’s home. She, and the daughter, visited with the representatives and made it very clear that what they were looking for 100% coverage of the mother’s dialysis treatments. The representatives told them that if she signed up her dialysis treatments would be covered 100%. It soon became clear to the mother and daughter that the plan only covers 80% of dialysis treatments, the same as traditional Medicare. In addition, it became clear that the plan never should have offered to sign her up in the first place because she has ESRD which precludes her from signing up for this plan.
  • Another gentleman called the Center. He was visited by an MA plan and was told that the plan was “free” – which it is not. He received a letter from Social Security stating that $46.00 would be deducted from his Social Security check. This is how he found out that the plan was not “free.””

“Medicare Advantage” is starving the successful traditional Medicare program and hurting beneficiaries. Studies by MedPAC, the Congressional Budget Office, and the Commonwealth Fund and numerous scholars confirm that taxpayers are spending between 12% – 19% more on private plans than it would cost to serve the same people in the traditional Medicare program. Meanwhile, private Medicare has proven far less able to provide secure health insurance and a wide choice of doctors and other health care providers for older people and people with disabilities.

Medicare was enacted in 1965 because private industry failed to insure more than 50% of older people. It would be ironic if privatization condemned Medicare now, returning older and disabled people to the vagaries of the private, for-profit insurance industry.

The solution for the Medicare crisis is not to increase the eligibility age or decrease benefits, but to stop privatizing it at the expense of older people and taxpayers.

Judith Stein
Center for Medicare Advocacy, Inc.
October 15, 2008

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