# Medicare Advantage Cost 22% More per Patient **URL:** \ **Category:** Macro Economic Trends and Risks\ **Created:** [November 26, 2024, 3:40pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715 "2024-11-26T15:40:24Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![tjscott0](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/tjscott0/32/1083_2.png) [@tjscott0](https://discussion.fool.com/u/tjscott0)\ **Post date:** [November 26, 2024, 3:40pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/1 "2024-11-26T15:40:24Z")
> **[Taxpayers Spend 22% More Per Patient to Support Medicare Advantage – The...](https://www.nakedcapitalism.com/2024/11/taxpayers-spend-22-more-per-patient-to-support-medicare-advantage-the-private-alternative-to-medicare-that-promised-to-cost-less.html)** > > How Medicare Advantage, with less coverage than traditional Medicare via gatekeeping and thin networks, is a bad deal for taxpayers too. _Medicare Advantage, also known as Part C, was [supposed to save the government money](https://www.cms.gov/newsroom/fact-sheets/cms-continues-efforts-cost-efficient-payer-quality-health-care-medicare-beneficiaries). The competition among private insurance companies, and with traditional Medicare, to manage patient care was meant to give insurance companies an incentive to find efficiencies. Instead, the program’s payment rules overpay insurance companies on the taxpayer’s dime._ Private corporations are more efficient…in wringing out dollars from the federal government. _Researchers have found that the overpayment to Medicare Advantage companies, which has grown over time, was, intentionally or not, baked into the Medicare Advantage payment system. Medicare Advantage plans are [paid more for enrolling people who seem sicker](https://www.commonwealthfund.org/blog/2022/taking-stock-medicare-advantage-risk-adjustment), because these people typically use more care and so would be more expensive to cover in traditional Medicare._ _However, differences in [how people’s illnesses are recorded](https://doi.org/10.1377/hlthaff.2023.01530) by Medicare Advantage plans causes enrollees to seem sicker and costlier on paper than they are in real life. This issue, [alongside other adjustments to payments](https://doi.org/10.1093/haschl/qxae093), leads to overpayment with taxpayer dollars to insurance companies._ _But there is a critical bias baked into risk adjustment. Medicare Advantage companies know that they’re paid more if their enrollees seem more sick, so they diligently make sure each enrollee has [as many diagnoses recorded as possible](https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_Ch13_MedPAC_Report_To_Congress_SEC.pdf)._ _In traditional Medicare, most providers – the exception being [Accountable Care Organizations](https://www.healthaffairs.org/content/forefront/growth-value-based-care-and-accountable-care-organizations-2022) – are not paid more for recording diagnoses. This difference means that the same beneficiary is likely to have [fewer recorded diagnoses](https://doi.org/10.1086/704756) if they are enrolled in traditional Medicare rather than a private insurer’s Medicare Advantage plan. Policy experts refer to this phenomenon as a difference in “[coding intensity](https://www.medpac.gov/document/chapter-13-estimating-medicare-advantage-coding-intensity-and-favorable-selection-march-2024-report/)” between Medicare Advantage and traditional Medicare._ ---
**Author:** ![steve203](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/steve203/32/3302_2.png) [@steve203](https://discussion.fool.com/u/steve203)\ **Post date:** [November 26, 2024, 3:48pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/2 "2024-11-26T15:48:10Z")
That fact was established years ago. Part C, and Part D, were purposely designed to, first, enrich the insurance companies. Steve ---
**Author:** ![intercst](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/intercst/32/1543_2.png) [@intercst](https://discussion.fool.com/u/intercst)\ **Post date:** [November 27, 2024, 3:50am UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/3 "2024-11-27T03:50:49Z")
You don’t need to look any further than this letter. > **[Manchin Leads 63 Bipartisan Senators In Urging Support For Medicare Advantage...](https://www.manchin.senate.gov/newsroom/press-releases/manchin-leads-63-bipartisan-senators-in-urging-support-for-medicare-advantage-program)** > > The Official U.S. Senate website of Senator Joe Manchin of West Virginia The bipartisan culture of corruption at work. intercst ---
**Author:** ![Leap1](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/leap1/32/72176_2.png) [@Leap1](https://discussion.fool.com/u/Leap1)\ **Post date:** [November 27, 2024, 3:57am UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/4 "2024-11-27T03:57:16Z")
@intercst I have not been following this discussion closely. Please bullet point the main problems with MA regarding the patient costs and coverages. I have an older friend on MA that does not know where to start researching this. I told him it was not great coverage. He asked why? I said he needed to research it. He was upset because he does not understand where to research it. I get that there are two positions. Either you are healthy for a while or eventually you get ill and need a lot coverage. Generically you are a senior after all. He is thinking in terms of coverage for the small doctors’ visits. He is not looking down the road to calamity. ---
**Author:** ![intercst](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/intercst/32/1543_2.png) [@intercst](https://discussion.fool.com/u/intercst)\ **Post date:** [November 27, 2024, 5:55am UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/5 "2024-11-27T05:55:06Z")
> [@Leap1](#): > > I have not been following this discussion closely. Please bullet point the main problems with MA regarding the patient costs and coverages. It’s just arithmetic. Traditional Medicare spends 98.8% of its program cost on medical care for beneficiaries and 1.2% for admin expense. Medicare Advantage insurers are only required to spend 85% of the money they get from Medicare on actual health care and can siphon off up to 15% for overhead and profit.. It’s like buying an S&P 500 index fund with a 1.50% expense ratio and expecting that you’ll get a better return than one with less than a 0.10% expense ratio. Arithmetic just doesn’t work that way. I’ve been trying to explain this to Goofy for years. > **[What I'm doing for Medicare insurance at age 65](https://retireearlyhomepage.com/medicare2020.html)** > > Wade Pfau, SWR, safe withdrawal rates, retirement withdrawals, portfolio survival intercst ---
**Author:** ![intercst](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/intercst/32/1543_2.png) [@intercst](https://discussion.fool.com/u/intercst)\ **Post date:** [November 27, 2024, 6:09am UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/6 "2024-11-27T06:09:00Z")
> [@steve203](#): > > That fact was established years ago. Part C, and Part D, were purposely designed to, first, enrich the insurance companies. Actually it started all the way back with letting private insurers sell Medigap policies in the 1960’s. > **[When did Medigap plans start? - Senior65](https://www.senior65.com/medicare/article/when-did-medigap-plans-start)** > > Medigap plans did start in 1966. They were insurance policies designed to supplement Original Medicare (Parts A and B). Medigap insurers essentially do nothing. Medicare itself does all the benefit administration and accounting – CMS just tells the Medigap insurer how much he has to pay on the deductible. For doing nothing, the Medigap insurer gets to skim off between 19% and 21% of premiums collected, depending on the state. It would be cheaper and easier, if Medicare just offered you the option for “out-of-pocket expense protection”, at Medicare’s actuarial cost, which would be about 20% less than the premiums being charged for Medigap. Medigap insurers are just “toll takers” who provide no service. CMS is doing all the work for them. intercst ---
**Author:** ![HohumYNWA](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/hohumynwa/32/1511_2.png) [@HohumYNWA](https://discussion.fool.com/u/HohumYNWA)\ **Post date:** [November 27, 2024, 8:24am UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/7 "2024-11-27T08:24:37Z")
Will the Medicare issue also be assigned to Elon, Vivek & Dept of Govt Efficiency (DoGE)? Or, is it a sacred cow? ---
**Author:** ![intercst](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/intercst/32/1543_2.png) [@intercst](https://discussion.fool.com/u/intercst)\ **Post date:** [November 27, 2024, 8:38am UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/8 "2024-11-27T08:38:30Z")
DoGE is a side show. The House and Senate Appropriation Committees ( the folks who approve spending and sign the checks) aren’t going to give up their power to Elon and Vivek. Trump has already said he’s not cutting Medicare, though he might send more Medicare money to private insurers. I saw an interview last week where one of the panelists said that if you tweak all the regulations in favor of Medicare Advantage sales brokers, you might have 75% of Medicare Beneficiaries on MA after 4 years (It’s about 50% today.) intercst ---
**Author:** ![VeeEnn](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/veeenn/32/3379_2.png) [@VeeEnn](https://discussion.fool.com/u/VeeEnn)\ **Post date:** [November 27, 2024, 11:43am UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/9 "2024-11-27T11:43:52Z")
> [@Leap1](#): > > @intercst > > I have not been following this discussion closely. Please bullet point the main problems with MA regarding the patient costs and coverages… > > …He is thinking in terms of coverage for the small doctors’ visits. He is not looking down the road to calamity. If there’s one topic on this board that no one _ **needs** _ to follow closely, it’s those about the shortcomings of Medicare Advantage. For sure @intercst has done the serious heavy lifting on reporting and in depth analysis, with @WendyBG hot on the heels…but we’ve had multiple threads started by other posters too. I’ll wager that if you just do a search on the topic here in just the past month or two, you’ll find more bullet points than you could ever want to need…and plenty of posts made by your very self! Pretty much every warning article you see is about folk who were only interested in having already low cost appointments for free, without any concern or understanding of the reality of MA’s non coverage. ---
**Author:** ![Leap1](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/leap1/32/72176_2.png) [@Leap1](https://discussion.fool.com/u/Leap1)\ **Post date:** [November 27, 2024, 3:18pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/10 "2024-11-27T15:18:57Z")
So none of you are saying less coverage with MA compared to Medicare? ---
**Author:** ![MataroPete](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/mataropete/32/16060_2.png) [@MataroPete](https://discussion.fool.com/u/MataroPete)\ **Post date:** [November 27, 2024, 3:58pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/11 "2024-11-27T15:58:43Z")
One of the things others here have pointed out that while much (not all) of the coverage remains the same or similar, it’s the denial of that coverage that recaps a lot of the administrative overhead fees - the “up to 15%” profit take. Pete ---
**Author:** ![jerryab2](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/jerryab2/32/3274_2.png) [@jerryab2](https://discussion.fool.com/u/jerryab2)\ **Post date:** [November 27, 2024, 3:58pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/12 "2024-11-27T15:58:57Z")
> [@Leap1](#): > > So none of you are saying less coverage with MA compared to Medicare? No. MA may not cover all doctors because some doctors refuse the low comp rate paid by the insurance company. If the doctor accepts Medicare, then you reasonably know what it will cost. IF your primary care doctor is in a MA plan being considered, then that doctor might be a “fee-free” appt. BUT–key point–most doctors any senior will visit will be _specialists_–and those visits are NOT free. AND the specialists available must be in your MA plan, or else the cost is “out of network” and is FAR higher. ---
**Author:** ![intercst](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/intercst/32/1543_2.png) [@intercst](https://discussion.fool.com/u/intercst)\ **Post date:** [November 27, 2024, 7:34pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/13 "2024-11-27T19:34:10Z")
> [@Leap1](#): > > So none of you are saying less coverage with MA compared to Medicare? > **[Senate report scrutinizes Medicare Advantage prior authorization denials for...](https://www.aha.org/news/headline/2024-10-17-senate-report-scrutinizes-medicare-advantage-prior-authorization-denials-post-acute-care-services)** > > A report released Oct. 17 by the Senate Homeland Security Committee’s investigative subcommittee scrutinizes some of the nation's largest Medicare Advantage insurers for their use of prior authorization and high rates of denials for certain types of... Most people don’t file appeals when an insurer denies coverage for a procedure they’re supposed to cover. The insurance companies know that and deny stuff to boost profits. Of the 2 million Medicare Advantage denials only 11% were appealed, but over 80% of the time, the appeal was successful. MA insurers are denying a lot of stuff they should be covering. Medicare Advantage insurers make money by denying health care to their customers. intercst ---
**Author:** ![MoneySlob](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/moneyslob/32/2609_2.png) [@MoneySlob](https://discussion.fool.com/u/MoneySlob)\ **Post date:** [November 27, 2024, 7:47pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/14 "2024-11-27T19:47:28Z")
> [@intercst](#): > > Medicare Advantage insurers make money by denying health care to their customers. So, does vanilla Medicare deny claims? ---
**Author:** ![intercst](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/intercst/32/1543_2.png) [@intercst](https://discussion.fool.com/u/intercst)\ **Post date:** [November 27, 2024, 8:08pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/15 "2024-11-27T20:08:23Z")
> [@MoneySlob](#): > > So, does vanilla Medicare deny claims? Sure, for stuff that isn’t covered by Medicare. Medicare Advantage insurers are denying care for procedures **that are covered by Medicare.** intercst ---
**Author:** ![DrBob2](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/drbob2/32/3456_2.png) [@DrBob2](https://discussion.fool.com/u/DrBob2)\ **Post date:** [November 28, 2024, 12:41pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/16 "2024-11-28T12:41:20Z")
> [@intercst](#): > > Of the 2 million Medicare Advantage denials only 11% were appealed Is there a way to put that in context? What percentage of denials were correct and/or “obvious”? For example, earlier this year I was going to take a regime of medication. Coverage was denied (correctly) because I hadn’t had a prerequisite treatment. I didn’t appeal for obvious reasons. If I really did have the prerequisite then I could have appealed and presumably would have been successful. DB2 ---
**Author:** ![VeeEnn](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/veeenn/32/3379_2.png) [@VeeEnn](https://discussion.fool.com/u/VeeEnn)\ **Post date:** [November 28, 2024, 2:31pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/17 "2024-11-28T14:31:07Z")
Well, that’s how “denials by stealth” oftentimes work. Could you put _your_ example in context. There’s every possibility that the prior treatment has been demonstrated to be ineffective (to anyone but your insurance company’s bean counters…or any other third party payer, come to that) Insisting on a demonstration of failure of that line of treatment would, at best, delay effective care…or even allow a condition to worsen to untreatable whilst waiting to be able to demonstrate that the insurance company’s choice was suboptimal…or useless. For sure, if my proposed treatment regimen for advanced coronary artery disease (Repatha…a PCSK9 inhibitor) had been denied until the statin alone treatment failed…with a heart attack or stroke, say…that wouldn’t speak well to allowing an insurance company to decide the “correctness” of my physician directed care. ---
**Author:** ![intercst](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/intercst/32/1543_2.png) [@intercst](https://discussion.fool.com/u/intercst)\ **Post date:** [November 28, 2024, 8:18pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/18 "2024-11-28T20:18:23Z")
> [@DrBob2](#): > > Is there a way to put that in context? Sure. The 11% that were appealed got approved over 80% of the time. At the Senate hearing, the fear was that since denials are part of the business model, the 89% that weren’t appealed would likely have be reversed at that same “over 80%” rate. intercst ---
**Author:** ![Tamhas](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/tamhas/32/4672_2.png) [@Tamhas](https://discussion.fool.com/u/Tamhas)\ **Post date:** [November 28, 2024, 8:39pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/19 "2024-11-28T20:39:09Z")
That seems like a rash assumption. Do the denials include cases where someone has used the wrong code or something and denying merely detected this inappropriateness and led to a correction rather than an appeal? ---
**Author:** ![intercst](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/intercst/32/1543_2.png) [@intercst](https://discussion.fool.com/u/intercst)\ **Post date:** [November 28, 2024, 8:57pm UTC](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715/20 "2024-11-28T20:57:19Z")
> [@Tamhas](#): > > That seems like a rash assumption. Depends on your understanding of their business model. intercst [Next page](https://discussion.fool.com/t/medicare-advantage-cost-22-more-per-patient/110715.md?page=2)