The Sad Saga of Medicare Advantage and Managed Medicaid Programs (Part 5): The Public Has A Right To Know What Went Wrong and Why

Huge numbers of Americans are insured through Medicare Advantage, Medicaid, ACA and commercial managed care companies. Could their problems be of their own doing? They know the answer. Share it.

That bridge in Brooklyn is still for sale.

When four (and maybe more) of the primary health insurers in this country declare they are in financial difficulty and can’t make projections for their business profits, we deserve to know what is going on and why this happened.

Do you really believe that the smart folks who run these companies (and are paid huge bucks to know the numbers) suddenly discovered that more hard-working Americans than the insurers expected woke up one nice sunny day and decided it was a good day for a hysterectomy or to have a heart attack? That the insurers were really surprised by an unexpected tsunami of claims for healthcare?

Really??????

These are no ordinary companies.

Consumers, businesses and governments don’t have discretion when it comes to buying health insurance: if they can afford it and get access to it they should have it—and in some way shape or form the only way most of them can get that health insurance is through these huge companies.

Costs of health care are huge, and if you develop a life-threatening illness you want to have the assurance that those who pay the bills can in fact pay the bills, in a timely and appropriate way.

More important, the reason so many of us have argued for years that Americans deserve access to affordable, quality health insurance and health care is because it makes a difference.

You want to talk about making America healthy?

Well, a significant part of making this country healthy is in fact access to health insurance. When large numbers of the folks don’t have insurance, we are indeed less healthy as a nation.

Many of you don’t recall what the world was like before the Affordable Care Act:

Before the ACA, millions of people could not only not afford health insurance, they couldn’t even get it if they had the money to pay the premiums. Rating systems, cherry picking and other shenanigans either denied folks coverage or made it so expensive because of the person’s risk factors that the premiums and restrictions could not be overcome through the available options to purchase insurance.

The system was broken and demanded a fix.

Like it or not, the ACA was the fix—and, again, whether you like it or not—it has made a difference.

I vividly recall the many analyses performed by my outstanding colleagues at the American Cancer Society that time and again showed that access to health insurance—along with healthy lifestyles, especially forgoing tobacco use, as well as education—made a huge difference in longevity and our perception of health.

Nothing since has changed that expectation:

Studies have shown repeatedly that getting insurance to folks BEFORE they get sick rather than getting them help AFTER they get sick, as still happens with Medicaid, improved many metrics of health, including outcomes from cancer treatment.

Those are lessons you don’t forget, but once again in the famous words of George Santayana, “Those who cannot remember the past are condemned to repeat it.”

Today we have a new twist to the story:

The insurance companies are in financial difficulty.

According to their public pronouncements, one of the key factors leading to that difficulty is the increase in the percentage of the premium dollars they receive and have to spend on paying health related claims has increased to unexpectedly high levels, thus reducing profits for the company and Wall Street.

Profits aren’t bad in and of themselves. Theoretically, they drive efficiency and better business decisions. Good companies that do good work or provide good products or provide good solutions for serious problems deserve to be compensated for their efforts. For public companies whose stocks trade in the public markets the question of how much they deserve to be compensated for those efforts depends on Wall Street and investors.

Whether that number is too high or too low is not for me to decide. What we must decide as a nation is whether we believe in a private system or a public system to pay for our healthcare. That is a political question I am not going to tackle here.

There is a genuine reason for the public to be concerned about this mess, to ask questions, to consider solutions, to be part of the discussion. We pay for this care, we rely on this care, we need this care.

Step back for a moment and consider some of the following:

· Right now, OVER HALF of Medicare beneficiaries are enrolled in Medicare Advantage plans, many of them through the four companies I have written about the past week. There are other “biggies” in the business, and so far they haven’t joined the chorus. But the reality is that not only do these companies together insure—with government backing—over half of the folks 65 and over on Medicare, they also insure those on Social Security disability or “dual eligibles” who are people who fall under both the Medicare and Medicaid umbrellas. They also have huge Medicaid managed care subsidiaries that many states rely on to administer state Medicaid programs. All told, these companies pay the healthcare costs and control that healthcare for huge numbers of Americans.

· Beyond those programs, much of the insurance on the ACA insurance exchanges in addition to health insurances provided through employers come through these companies in some way, shape or form.

· Congress recently granted the Medicare Advantage companies a whopping—in Medicare terms—pay increase for 2026, much more than the paltry amounts they have offered for physician payments over the past several decades.

· Granted that those payments don’t start until calendar year 2026, but Wall Street is “forward looking” and considers those facts in it’s assessment of these companies, and right now the wisdom of the financial masses sees difficulties ahead.

· These companies are PAID for the alleged increased risk and increased care they are providing to Medicare beneficiaries. We know that United Healthcare is currently under investigation for inappropriately increasing the number and complexity of diagnoses those in its Medicare Advantage program, as discussed in a previous blog. They get paid a lot of extra money for gerrymandering those diagnoses, many of which do NOT require increased care or have a genuine impact on the costs to care for their patients. Now the Justice Department wants to know if billions of dollars have been funneled into United’s coffers inappropriately.

· Meanwhile, United and others say that the pay increase and the supplemental payments they receive for complexity still aren’t enough to cover their costs.

· Unknown as I write this is whether the other companies have been doing the same. Logic suggests United is not alone in making folks appear sicker than they are. Imitation is the most sincere form of flattery.

· Meanwhile, these companies are no longer just health insurance companies. They are behemoths that control much, much more of the health care we receive in so many ways. I assure you that there are few outside experts who can really understand the way these companies have infiltrated health care delivery and all the levers they pull on a daily basis.

· Without going into how these companies operate, let’s just say that the degree of infiltration they have achieved allows them to shine a light over here but not over there, and pass money, profits and losses from one place to another without anyone outside having any idea of what they are doing.

· One example: United owns or controls 10% of the physicians in the United States. Think about that for a moment: 10%!!!!!!! Do you realize what that means in practical terms, of how much influence they have over those docs to do what UNITED wants them to do—which may not always be what the doc thinks is best for their patients????? “Conflict of interest” doesn’t even begin to explain the problems with this arrangement.

· The other huge factor in all of this is the fact that several of these companies also run their own pharmaceutical benefit managers (PBM) who control the medicines we receive to treat our illnesses as well as arrange contracts and payment schedules with the manufacturers in ways that even smart folks have no idea how to figure it out.

· Ultimately, when it comes to PBMs, you have no idea who gets paid what for which medicine. None whatsoever. How do you think that Novo Nordisk and Lilly have “street prices” you need to pay for weight loss medicines that exceed $1000 at the pharmacy counter if you buy it on your own, while those same companies can market those same medicines for a couple hundred bucks if you buy from them directly? Do you think Lilly and Novo are such kind companies that they take a loss on their largesse? Do they absorb the considerable expense required to provide that medicine directly to consumers and take a loss? I don’t think so.

· Meanwhile, CVS says that their decision to just sell Wegovy and no longer provide access to Zepbound on the CVS formulary is OK when almost everyone else who knows anything about these medications disagrees, including recent research in the New England Journal of Medicine. Their rationale? Essentially, in so many words, “They still lose weight, maybe not as much. That’s OK.”

Yowzah!!!!!

(Please see my “Quick Take” posted after this blog about some incredibly enlightening information that came to light about that CVS statement and what CVS is saying to their clients and the public as to why they will no longer cover Zepbound prescriptions. It is truly eye-opening.)

Ultimately, we the public are paying the bill. Those companies exist to serve our needs and expectations. They have done a pretty lousy job as years of frustration by patients, families, clinicians, hospitals, clinics and governments can testify.

Now, they have a problem, and sympathy has been hard to find.

“Deny/delay” has already led to too many tragedies, including the murder of a senior United Healthcare executive. And when the public (sadly) sympathizes with the murderer, that should send a message loud and clear: Folks are tired of the crap.

It wasn’t supposed to be this way, but it is. And now all of us must recognize we have a problem that is very, very real and very, very serious. It may simply go away with some more financial engineering, increased premiums, pleas for more government largesse, and tightening of the already bizarre and onerous requirements that are placed in the way of quality, reasonable medical care.

As noted before, these companies know why this has happened, whether it is due to people suddenly desiring to get serious illnesses, or to have a surgery they have put off voluntarily by their own decision for years?

Do you think that one day a woman wakes up, rolls over, and says to her significant other, spouse, partner, “Gee, honey, I think it’s a great day to get a total hysterectomy!”????

Or maybe—just maybe-- the insurers themselves kicked the can for needed care down the road just a bit too long so that the chickens have now come home to roost.

My concern is that the last suggestion may be the real answer.

Why?

Because these companies have data by the ton, and they know how to analyze it. They know EXACTLY why costs have suddenly shot up. And if the reason was palatable and something the public could understand, they would have shared it already.

Instead, we get platitudes and proclamations that the medical loss ratio—the percentage of premiums spent to pay claims—has increased. Period. End of sentence. Nada more. Crickets. Absolute DEFCON silence for the mission (and certainly not on Signal!!!!).

The question remains:

Are these companies themselves responsible for the mess they are in??????

They haven’t been shy about raising premiums. Medicines have become much more expensive, but they already knew that and built it into their financial forecasts. That is not a completely controllable factor, but it is a known factor.

Somehow, they claim, they have been blindsided by “demand for medical services.”

We, the public, have a right to know. We pay them for insurance. We rely on them for care. Over half of the Medicare folks are insured by them, and the suspicion is that Dr. Oz and his Medicare folks want more of us to move in that direction.

Can you imagine what would happen if these companies got hold of all that Medicare business and couldn’t cover the costs? Do the words “2008 Financial Crisis” have meaning for you?

And if you believe what the insurers are telling/selling you is in fact honest and truthful, that they are good actors and really care about us our nation’s health, then I continue to make an offer designed just for folks like you, one that you should seriously consider:

That bridge in Brooklyn is still for sale.

If interested, please make a down-payment to my anonymous international account in Bitcoin.