Medicare Privatization Abuses

It seems that outrageously high government subsidies aren’t enough to satisfy the private plans that participate in Medicare. Some of these Medicare Advantage plans have been caught using hard-sell tactics to pressure elderly Americans into signing up for policies that may leave them worse off than they would be with traditional Medicare coverage. The unscrupulous sales pressure is one more argument for removing the subsidies that are the only crutch allowing many of these plans to survive.
The abusive sales tactics are particularly egregious among the private fee-for-service plans. These plans receive the highest subsidies and do the least to earn them among the array of private offerings available for Medicare recipients.
State officials are investigating a range of sales abuses. In Georgia, two insurance agents were arrested and accused of signing up unwilling consumers; one beneficiary said her signature was forged by a door-to-door salesman. In North Carolina, the insurance commissioner is investigating complaints that agents switched residents of an assisted-living facility from traditional Medicare into private plans without their permission. At least five other states are investigating complaints about sales tactics.
Defenders of the private fee-for-service plans argue that they often provide better benefits or charge beneficiaries less than traditional Medicare does, a feat they are able to accomplish thanks to their huge subsidies. That is often true, but not always. Some beneficiaries have found that their doctors won’t accept patients enrolled in private fee-for-service plans. Others have been shocked to be hit with much higher co-payments than under traditional Medicare — as much as $100 a day for the first 20 days in a skilled nursing facility for which no co-payment would have been charged under traditional Medicare.
Congress needs to ensure that such abuses do not continue. And it should eliminate these lavish subsidies.