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These orthopedists are a step ahead of Obama

COMMENTARY | March 08, 2009

A Des Moines orthopedic practice has cut off Medicare Advantage insurers. Gil Cranberg thinks they’ve got the right idea—and wants reporters and editorial writers to start paying attention as Obama tries to end subsidies that have been draining the traditional Medicare program.

By Gilbert Cranberg

When I last visited my orthopedist’s office, displayed prominently in the waiting room was a notice that might have startled and ticked off some patients:

Attention Seniors: Important Information Regarding Your Medicare Coverage:

Des Moines Orthopaedic Surgeons and staff have provided the highest quality orthpaedic care possible to thousands of Iowa’s seniors for the last 45 plus years. We are concerned that the Medicare Advantage products are draining resources from traditional Medicare. Therefore, effective Jan. 1, 2008, DMOS will not accept any Medicare Advantage products.

Read “products” to mean insurers. These doctors, according to the notice, just won’t deal with Medicare Advantage companies.

“Draining resources from traditional Medicare” is essentially the concern of the Obama administration and why it recently proposed in its budget to end overpayments to Medicare Advantage insurers. The administration estimates it can save $176 billion over the next ten years by cutting the excess subsidies. It wants to use the savings to help finance its ambitious plans to expand health coverage.

Obama’s plan to trim support for Medicare Advantage is a sea change from the Bush administration, which promoted and pampered the private plans, giving them an average of 14 percent more than the government pays for coverage of patients under traditional Medicare. The extra pay enables the companies to offer sweeteners that have induced 10 million seniors to sign up – health club memberships, rebates of some or all of the Part B premium, expanded coverage, and so on. Costly marketing of the plans includes lots of full-page ads and complementary meals at popular restaurants in exchange for sitting through sign-up spiels.

Seldom are seniors told at the sessions that the add-ons are possible only because of big federal subsidies. Nor are they likely to be aware that the Bush administration savored Medicare Advantage as a way to privatize Medicare.

The seduction of seniors has given insurance companies a built-in lobbying force to resist efforts to reduce the government’s subsidy. The Obama administration faces a bruising battle to get that done not just from well-heeled and savvy insurance companies but from their gray-haired allies. In effect, the government is financing a lobby to prevent change in the costly status quo every time it enables a Medicare Advantage insurer to enlist a recruit.

The press needs to report fully on the impending battle. And, on editorial pages, such as in this New York Times editorial, the press needs to make the case for ending a wasteful subsidy that underwrites a dual system of coverage for the benefit of for-profit companies. The Obama administration, and my orthopedist, are on the right track on this issue, but they will need all the help they can get.

(Click here for a report I wrote earlier on Medicare Advantage, and here for a listing of articles in Nieman Watchdog by Medicare advocate Judith Stein.)

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