For 58 years, Medicare and Medicaid have provided life-saving and life-sustaining care for millions of Americans, but they are rapidly being weakened by politicians who insist on inviting corporations to oversee their implementation.
Health insurance companies are creeping into Medicare and Medicaid via so-called “managed care.” Often proposed as a cost-saving measure, managed care is when patients agree to visit only certain doctors and hospitals, and the cost of treatment is monitored by a managing company. Here in the United States, these companies are often corporations focused on maximizing profit at the expense of patients.
Gary Bent — a man who spent his entire life faithfully paying into Medicare — was just one of the millions of patients who have been denied crucial care because of corporate intrusion into the administration of Medicare benefits.
When Bent finally became eligible for the Medicare benefits he paid into, his employer placed him on a Medicare Advantage plan — a plan administered by a private health insurance company, rather than on a traditional government-administered Medicare plan. But in 2022, when Gary was diagnosed with melanoma for the second time, prior-authorization denials led to delays in getting the rehabilitation services and skilled nursing care he needed. He died March 3, 2023, of complications due to melanoma.
“It has been hard for me not to dwell on how things might have been different for my father, for our family, if my dad had just received the care he needed when he needed it,” said Bent’s daughter, Megan Bent, as she spoke to a small crowd gathered in front of the United States Capitol to commemorate the 58th anniversary of Medicare on July 25, 2023.
“My father was dedicated to creating change, doing what he could to make the world a better place,” Bent added. “I remember coming to D.C. to protest apartheid with him when I was kid, and I know that being here today and sharing our story, his story, is a way to continue his legacy and to continue to fight for him.”
Medicare and Medicaid are widely accessed public benefits programs in the U.S., with Medicare serving nearly 57 million older adults and Medicaid serving 87 million low-income, pregnant people and children. Yet despite the resounding popularity of these taxpayer-funded programs, politicians continue inviting profit-obsessed corporations into the implementation of these programs.
Medicare Advantage plans offered by private health insurers now cover more than 50 percent of all Medicare recipients at a cost to taxpayers of more than $400 billion a year. Health insurance companies are also creeping into Medicaid via so-called “managed care” (i.e. managed denials). Late last month, the U.S. Department of Health and Human Services (HHS) Office of Inspector General released a report that showed that 25 percent of the claims for Medicaid beneficiaries are denied by private insurers via managed care. To make matters worse, private equity firms are buying up nursing homes, and home care agencies are joining insurance companies in gouging public programs, causing older and disabled Americans to bear the cost.
Monetizing these programs flies in the face of the intent of Medicare and Medicaid and undermines the promises of coverage for those who need it most. Corporations beholden to quarterly profit margins and shareholders — not taxpayers or patients — have focused on increasing profit margins through two key strategies: overcharging the government while trimming costs by limiting the services they cover and paying care workers less; and denying and delaying care people need.
Corporate insurers offering Medicare Advantage plans are estimated to be overbilling the federal government by up to $75 billion a year, while routinely and pervasively denying and delaying care for older adults and disabled people on their plans. At least 2 million prior authorizations were denied by Medicare Advantage plans in 2021 alone. Yet despite all the hazards of Medicare Advantage, many people are lured into these plans through the promise of lower premium costs and because traditional Medicare fails to cover vision and dental care.
At the same time, private equity firms are joining insurance companies to profit off people at Medicare and Medicaid’s expense. Between 2000 and 2018, private equity’s stake in nursing homes grew from $5 billion to $100 billion. Private equity ownership accounted for half of the deals in the home care industry in 2018 and 2019, and its stake in the hospice field has grown by 25 percent between 2011 and 2020. The results are disastrous: layoffs and staff reductions, limitations of services, higher risks and worsening care outcomes. Patients in nonprofit hospice care see physicians three times more often than patients in for-profit hospices.
This profiteering invasion of programs ostensibly intended for public gain (not corporate profit), has life-and-death consequences for people across the country. One National Bureau of Economic Research study estimates that reassigning Medicare Advantage plan consumers with the worst rates of claim denials could avert at least 10,000 deaths per year. Similarly, research has shown that private equity purchases of nursing homes significantly increase patient mortality rates and decrease patient mobility.
While more and more Americans struggle to get the care they need, leading to preventable suffering and even death, corporations are enjoying outsized profits on taxpayers’ dime. An analysis of health insurers’ financial data from 2021 showed their profit margins on Medicare Advantage plans were more than twice that in other health insurance markets. UnitedHealth Group — one of the largest Medicare Advantage insurers — made more than $14 billion in profits in 2022. The other three largest for-profit Medicare Advantage insurers pulled in an additional $10 billion in profits.
Even though Medicare is a program most Americans believe will provide the services they need as they age, outside of a narrow home care benefit, Medicare does not cover the majority of aging and disability care people need to stay in their homes. Modernizing Medicare by adding vision, dental and aging and disability care coverage, and including an out-of-pocket cap to protect people from financial risk, would help position this program to continue delivering on its promise into the future.
Similarly, Medicaid is in deep need of an update and expansion. When home- and community-based services (HCBS) funding was added to Medicaid 42 years ago, federal law made that benefit optional for states to fund. Yet facility-based care at increasingly privatized nursing homes and institutions are mandatory services for states to fund, even though 77 percent of adults over 50 say they want to stay in their homes and communities.
Paired with chronic underinvestment, this intentional disinvestment in HCBS has forced nearly 700,000 people onto years-long waiting lists because states can choose to cap or limit the amount of people they serve. The bias toward institutionalization must be eliminated and rates must account for fair pay for direct care workers to both end the wait lists and expand HCBS for all who need it.
Our tax dollars should not be used to generate profits for large corporations or pay multimillion-dollar CEO paychecks. Instead, we should place every dollar invested in Medicare and Medicaid into providing services and care for aging adults, disabled people and families struggling to make ends meet. Lawmakers should choose to modernize Medicare and Medicaid, instead of privatizing them.
Beyond that, it is time to make aging and disability care in the home and community a guarantee for all who need it, focus on paying care workers instead of insurance middle men, move from benefitting private equity to protecting and expanding Medicare and Medicaid as public goods, and put people over profit.
We need and deserve Medicare for All, including universal home and community-based services. To get there, we must stop the privatization of these beloved public goods right now.
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