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    Wednesday, May 17, 2017

    Health Insurance Oligopoly Bilks Billions From Medicare Advantage

    One out of every three lucky Americans already on Medicare use private insurance to provide their coverage under a plan called Medicare Advantage. This was just another part of the perennial push to allow private companies to essentially skim from the monetary stream of social benefits like Social Security and Medicare. And, to be fair, the Medicare Advantage program has largely been considered a success.

    But a whistle-blower, Benjamin Poehling, at the UnitedHealth Group is charging that the health insurers involved in the program "have been systematically bilking Medicare Advantage for years, reaping billions of taxpayer dollars from the program by gaming the payment system." As you might expect, Medicare pays these insurers base on the health of the patients. The sicker the patient, the more money that Medicare would reimburse the insurance companies. According to Poehling, employees at these health insurers would scan patients' health records and look for ways to either increase the severity of the diagnoses or link certain diagnoses with other health issues the patient might have, thereby increasing the Medicare Advantage payout. According to some estimates, these Medicare Advantage overpayments to health insurers amount to over $10 billion per year. Medicare Advantage has been in place for 15 years.

    Poehling's complaint includes an email from his superior which states, "You mentioned vasculatory disease opportunities, screening opportunities, etc., with huge $ opportunities. Let’s turn on the gas!" Bonuses at UnitedHealth were based on hitting specific revenue targets and had nothing to do with improved health outcomes for patients.

    Currently, the Justice Department is also investigating four other Medicare Advantage insurers, Aetna, Humana, Health Net and Cigna’s Bravo Health for similar overpayment programs. The remarkable thing is that analysts have been complaining about these health insurers' practices for over a decade now. A study by the Centers for Medicare and Medicaid Services found that there were over $14 billion in overpayments in 2013 alone. Incredibly, no real effort was made to recover that money, primarily because of pressure from those very same health insurers.

    I can hear my libertarian and conservative friends saying that is what you get with government programs and wasteful government incentives. Wrong! This is what you get when allow the profit motive to drive the provision of the basic human need for health care. The kleptocratic oligopoly in the health insurance industry screams for the solution of a public option, not more privatization.

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