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>The Dark History of Medicare Privatization
>JANUARY 24, 2022
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>Rep. Pramila Jayapal has called it the
>"biggest threat to Medicare you've
>never even heard of." It's known as
>Direct Contracting (DC), a program
>concocted by the Trump administration
>and not yet ended by the Biden
>administration to fully privatize
>Medicare.
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>DC is patterned after Medicare Advantage,
>the publicly financed, privately owned,
>hugely profitable version of Medicare
>now enrolling 26 million people at an
>annual cost of $343 billion. Simply put,
>DC is Medicare Advantage (MA) on steroids.
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>The growth of Medicare Advantage is a
>35-year-long saga of a program conceived
>as a cheaper, better Medicare transformed
>into a behemoth that has not saved one
>cent nor produced better outcomes. Yet MA
>has beaten back every attempt to make it
>accountable for its cost and care. Like
>the Hydra, each victory adds more heft.
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>Medicare Advantage changes one critical
>element: the intermediary between the
>money and the services. Medicare still
>pays, but with MA it turns over all
>parts of the insurance function,
>including enforcing the rules for medical
>necessity and deciding how much to pay
>providers, to private companies. Retirees
>can choose from 3,834 plans offered by
>nine different companies in 2022. Four
>in ten Medicare beneficiaries have joined.
>Humana and UnitedHealthcare own half the
>MA plans.
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>MA companies have perfected the art of
>denying claims by requiring
>preauthorization of many services,
>especially expensive ones. For example,
>doctors treating UAW retirees for
>orthopedic injuries, a frequent legacy
>of assembly line work, must get MA prior
>approval for 246 specific procedures, or
>else the plan does not guarantee payment.
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>Like HMOs, the plans offer less freedom
>of choice, with limited provider networks
>and prior-approval requirements in
>exchange for sharply reduced and capped
>out-of-pocket expenses, and additional
>benefits like gym memberships.
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>The MA profit-making formula is simple:
>get a large sum of money from the Feds,
>spend less than traditional Medicare,
>give some of the excess to
>beneficiaries, and pocket the
>difference. Over the last 12 years
>(2009-2021), Medicare paid the MA plans
>$140 billion more than would have been
>spent if the same people stayed in
>Medicare. Put another way, Medicare
>during these years would have saved
>enough to pay for the enhanced Child
>Tax Credit in 2022, and then some.
>https://prospect.org/health/dark-history-of-medicare-privatization/
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