Brokers who enroll senior citizens in Medicare Advantage (MA) plan often make more on those members than the health plans themselves. Up to $500 can be spent on a broker fee by the health plan, contributing to a total member acquisition cost which can exceed 10% of the premium dollar. Even if Medicare Advantage plans can deliver the actual health benefit at a considerably lower cost than Medicare Fee For Service (FFS), it is possible that the entire savings could be consumed by member acquisition costs.
These costs are a tax on Medicare as a whole, a tax whose existence becomes simply unsupportable when the dire forecasts of Medicare solvency are considered. And an unnecessary burden on health plans as we enter an era in which cutbacks are likely.
The solution is easy enough. Where MA is available, make Fee For Service an Opt-Out rather than something which has to be “sold.” When the benefits of both FFS and the various MA plans are laid side by side and people are told that they can simply select a plan from the chart or else complete a lot of paperwork to go FFS, more people will select the MA plans without a broker than would select those plans with an expensive broker if they are put in FFS originally and need to be “sold” to get into an MA plan.
Since so much money is being saved to the system, a bonus of some type could be given to people who select health plans. Better to pay the individuals than the middlepeople. Or, $100 could be allocated to an independent, unaffiliated help line to answer questions and guide a decision.
Excluding the bonus, this “opt-out” approach is not unlike the Medicaid health plan approach today. It is actually kinder and gentler, because in Medicaid people are often not given an option of FFS. And yet, no one hears an outcry from Medicaid beneficiaries about constraints on their health care.
Further, there need be no concept of “renewal,” which currently also generates a broker fee. People can stay in the plans as long as they like. If they want to change plans or go FFS, they can take that initiative themselves.
Yes, there is a slight inconvenience to people who want to stay in FFS. But most MA plans offer comparable or better benefits at a lower cost than FFS and most doctors who accept Medicare assignment are also in many MA health plans. The inconvenience to some people is far outweighed by the savings to the system as a whole, which creates the bonus opportunity.
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