Matthew Holt

Karen Ignagni tells (some of) the truth

Long time THCB readers will remember how several times I’ve called out AHIP president Karen Ignagni for being economical with the truth. Today in a letter to the NY Times she actually tells it how it is. Medicare Advantage plans provide more and better benefits than the FFS program. Ignagni also says that FFS program is outdated and that Medicare Advantage plans also emphasize prevention, wellness, care coordination and management of chronic conditions, do better than the FFS program in reducing hospitalizations and even are fostering the innovations needed to reduce health care cost growth. So given that there is so much waste and poor care in the FFS program (over 35% by most estimates) why do the so superbly managed Medicare Advantage plans require and spend more money per capita than the FFS program? Imagine my surprise when I was unsuccessful in my search to find the explanation for this in Ms Ignagni’s letter.

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dennis byron
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@ john ballard I have a professional grasp of Medicare but not of exchanges. My only knowledge of exchanges is that I was forced onto the Massachusetts exchange by the effects of RomneyCare (my insurer stopped selling direct to individuals but only through brokers because fo RomneyCare rules and restrictions). The Massachusetts exchange is a nightmare. Think of all the joke punchines you’ve heard about the DMV being in charge of your healthcare and double them. Luckily, only about 3% of Massachusetts residents have to deal with the RomneyCare exchange and — personally — I only had to deal with… Read more »

Dennis Byron
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Dennis Byron

Nothing snarky meant by “mentality.” I’ve been in an HMO for 30 years (back when the clinic/hospital/insurance administrator were all one legal entity). Both conceptually and philosophically, it makes sense to me. [And for me… I basically have the same doctors/resources/benefits post-65 (that is, on Medicare) as I had pre-65, except that as a self employed person my monthly premium has gone from $850 a month for most of 2011 to $146 a month in 2012.] That clinic/hospital/insurance administrator all-in-one mindset (better word than mentality?) is what PPACA (and I mentioned Dr. Berwick only because you did) wants for everyone…… Read more »

John Ballard
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Thanks for your followup. Sorry if I sounded prickly. I think we’re pretty much on the same page. I sense you have a professional grasp of what is meant by “exchanges.” I have come across the name of Alain Enthoven and tried to figure out how that exchange concept works but I’m still not clear. See if this is close— Apparently every individual state is charged with formulating a slate of insurance plans, each of which is plainly defined regarding what is and is not “covered” and to what degree, co-pays, OOP max, etc. Private insurance companies are then invited… Read more »

John Ballard
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Thanks for that. And you’re correct, the PPACA packaged ACO is in fact the old HMO reincarnated. (But I find that snarky use of the word “mentality” somewhat off-putting.) Of that I’m well aware. I like your shorthand about the Plan A/B/Gap/D bundle versus the A/B/C bundle although it makes Original Medicare look like the wrinkled old relic it is compared with the newer model. It’s too soon to tell which will be the better deal in the long run. The result will turn on whether Medicare can lob off enough wasted resources to compete with the administrative expenses +… Read more »

Dennis Byron
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Dennis Byron

@John Ballard You cover a lot of ground above. First of all, to sign up for Plan C, you have to buy into the HMO concept, conceptually and ideologically. If you don’t have the PPACA/Dr. Berwick mentality (after all, HMO… ACO = the same thing), Plan C is not for you. Second, if you travel a lot, live in different places at different times of the year (e.g., snobird), like to do the research to figure out who to go to in your geography for a cardiology/opthamoloy/endricology/etc. exam (are the type that is able to decide yourself if you even… Read more »

John Ballard
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“…25% of Medicare recipients belonged to a Part C plan last year but only used 21% of the Medicare funds expended.” I had no idea the number was that high. My wife and I were MA the first year we qualified because the premium was ZERO! She had a hospital stay and after doing the arithmetic we figured it would have been a wash with a traditional Medigap policy with a premium. We had to go with traditional Medicare the second year because there were no MA plans offered where we live. We were advised that had there been an… Read more »

dennis byron
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The so-called per-capita cost is not the way to look at Part C. It is just a Congressional accounting device, like a CBO projection. The meaningful statistic is that 25% of Medicare recipients belonged to a Part C plan last year but only used 21% of the Medicare funds expended.

Al Lewis
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I will be posting on this topic shortly. A lot of the “gap” (which is supposed to be getting phased out of existence anyway) is due to the $500-to-$1000 acquisition cost/member. Vouchers won’t solve this problem since health plans will still have to compete for members. A lot of the remaining gap is profit — these MA plans can be very profitable. My posting suggests having health plans bid to become the default plan in their counties. People can still use the FFS option but it will no longer be automatic. (They can also pick another health plan.) Both the… Read more »