President Obama is taking lots of heat over his health care proposal. One very vocal group opposed to it is those on Medicare, such as I. The summary comment is that we seniors fear that Obama will cut Medicare to cover those not having insurance. And the fact is that his plan does do this.
About 11 million Medicare recipients have taken on the Advantage Care program. In this program an insurer agrees to provide all the benefits you get from Medicare, with a big savings. Under Medicare the recipient is required to pay 20% of most medical bills and Uncle Sam picks up 80%. The Advantage plan pays all the cost, i.e. the member does not have to pay 20%. Advantage plans also offer features not offered by Medicare, such as emergency medical attention when abroad, the reason I have it. Advantage plans also provide more drug benefits and other services such as preventive care services than does Medicare. They also cover some of your dental care costs.
Now for the cost. Medicare pays a flat rate for each person enrolled in an Advantage plan, so much per month and, try as I have to find out how much is paid, I have not been able to find the exact payment, so suspect it varies from place to place according to local costs. But the cost is clear to Medicare, for a flat rate payment, Medicare passes off all responsibility for caring for those Medicare recipients enrolled in Advantage Care plans to the insurance company offering the plan. For the regular Medicare recipient Medicare is responsible for 80% of the recipient’s health costs, without a limit. In other words, for the Advantage Care enrollee, Medicare has a clear and fixed cost. For the regular Medicare recipients, Medicare has an endless exposure.
Sounds like a great program and that is why I and 11 million others use it. Well here is the rub. President Obama will do away with the Advantage Care program in his new health care proposal. So much for him promising us that we can keep our current health care program. There are 11 million who will lose theirs.
Obama does offer a rationale for cutting the Advantage Care plan. He says it costs too much, more than what is needed to provide the services rendered. His calculation comes from a failure to understand what insurance means. Insurance means to cover an unforeseen event. The flat rate paid for each Medicare recipient in an Advantage Care plan is an insurance premium. It may or may not be used to pay for services provided to a specific Advantage Care recipient, but it will pay for all services rendered to all members as necessary. So while paying say $3000 a year to cover Leo Cecchini may or may not be needed to pay for my personal care, it is used to pay for all members’ care. If I do not use any medical services, Obama’s bean counters say they have paid $3000 for no care rendered. I leave it to the reader to see the obvious case of cutting off your hand to spite your face.
No surprise that Medicare recipients suspect the President wants to pay for covering those who do not now have health insurance by cutting Medicare coverage. Ending the Advantage Care plan is a clear signal that that is exactly what will happen.