Medicare Advantage: A Goldmine for Health Insurance Companies
Many health insurance companies used to thumb their nose at Medicare patients, the firms believing they were better off investing in the private market than the federal government. But with the creation of Medicare Advantage, which gave insurers a direct stake in the Medicare business, companies are jumping on a goldmine of opportunity.
Wendell Potter, a former CIGNA executive, calls Medicare Advantage a “pot of gold” for insurance companies, as it has become an “increasingly important revenue stream” for them, “especially the big for-profit corporations.”
Writing for the Center for Public Integrity, Potter said a big reason why Aetna wants to buy up Humana (a $37-billion offer), and why Anthem seeks to merge with Cigna (a $54-billion bid), “is the desire of the acquiring companies to boost their presence in the privately-run Medicare business.”
As it currently stands, wrote Potter, “a big chunk of that federal money is now flowing through the insurance industry, so much so that many companies have become dependent on it to sustain their profits.”
“The efforts by some of those companies to recruit Medicare eligible Americans into their privately operated (but publicly financed) Medicare Advantage programs have been wildly successful. As many as one in three of the country’s senior (65 and older) and disabled citizens are now enrolled in a private plan,” he wrote.
Potter believes that the latest revolving door announcement—former chief administrator of the Centers for Medicare and Medicare Services Marilyn Tavenner being snatched up to become the new president of America’s Health Insurance Plans, the giant lobbying group for the health insurance giants—is further evidence of the industry’s unwavering aim for federal dollars.
To Learn More:
Latest Swing Of Revolving Door Puts Former Medicare Czar In Charge Of Health Insurance Lobby (by Wendell Potter, Center for Public Integrity)
Head of Obama’s Health Care Rollout to Lobby for Insurers (by Robert Pear, New York Times)
Government Audits Reveal Health Insurance Companies Regularly Overcharge Medicare Advantage (by Steve Straehley, AllGov)
Fraudulent “Upcoding” Costs Medicare Advantage $2 Billion a Year (by Steve Straehley, AllGov)
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