Medicare offshoot draws flak

Insurance Commissioner Mike Kreidler and advocacy groups blasted Medicare Advantage as too expensive for taxpayers Tuesday.

The program allows private companies to offer plans paid for by the taxpayer-financed Medicare program, which provides health care to about 800,000 seniors and people with disabilities in the state.

The private plans cost $1,503 a year more than traditional Medicare, according to the Washington Community Action Network.

“Those additional benefits that are necessary for seniors and people with disabilities ought to be provided through traditional Medicare,” said Joshua Welter, organizing director of the group.

Kreidler said his office has received more than 300 complaints about the plans since September, including allegations of high-pressure sales by marketers.

He called on Congress to end the plans or limit their number — more than 70 are offered in Washington — and make them subject to his office’s oversight.

However, a May report by the Centers for Medicare and Medicaid Services in Seattle showed extra benefits in using the increasingly popular program.

“Those who are enrolled in Medicare Advantage, about 155,000 … actually saved around $16 a month,” spokesman Michael Marchand said.

Traditional Medicare pays doctors and other health care providers a set rate based on the procedure performed and the county in which the patient is treated.

Medicare Advantage plans were changed at the same time a prescription-drug benefit was added to the federal program in 2003. The changes allow private companies to set up insurance-like systems such as approved provider networks, and to receive more money.

On average, the government pays the private plans 12 percent more per person than it does through its traditional fee-for-service system, according to the congressional Medicare Payment Advisory Commission.

The Community Action Network said overpayments in Washington are much higher, at almost 22 percent per person, resulting in $233 million in extra spending a year for taxpayers. That figure was based on data from the New York-based Commonwealth Fund.

Medicare’s own Washington state report suggested that capping payments to the advantage plans at the same level as the traditional plan would save more: $255 million a year.

But the report also warned the cap would certainly mean fewer benefits for members of the plan, which is more popular than traditional Medicare with minorities and the poor in particular.

The Puget Sound Alliance of Retired Persons also supported Kreidler and the Community Action Network in calling for changes in Medicare Advantage.