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Originally Posted by Happydaz
Let me clarify my topic. I am not talking about how much a Medicare Advantage plan or Medicare-MediGap plan costs an individual patient nor how much these plans reimburse a medical provider or hospital. I am referring to the cost these two plans cost CMS, the government Medicare program that our Medicare taxes and other funds are used to pay out for claims. What it comes down to is Medicare Advantage plans cost the Medicare fund more than regular Medicare. Medicare Advantage plans were supposed to cost less but due to unexpected bonuses and other costs, Medicare has had to pay $321 (recent 2019 data) more per patient than regular Medicare. Since Advantage plans restrict doctor choice, drug choice, require specialist referrals and were paid a set amount of money per patient, they were seen as a way for the government to save money over regular Medicare. Advantage plans are administered by insurance companies and they are extremely profitable. The Advantage plans also offer a lot of freebies, like low premiums and low co pays, free gym memberships, free over the counter drugs, etc. so they are attractive to individuals signing up as they may cost them less up front, but our Medicare fund pays more. This may mean that Advantage plans may come under scrutiny by Congress.
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I thank you for bringing this topic to attention. I did a Google search and found an interesting article which describes the process. As any article could be subject to being biased and incorrect, one must be suspect to the article and to interpretation. The article is on this link.
Why Medicare Advantage costs taxpayers billions more than it should – Center for Public Integrity
So, my simplistic interpretation is "Fraud", not by users or providers, but rather by the Medicare Advantage Programs providing the networks. Apparently, the initial program was meant to eliminate fraud by individual claims and this program was conjured up to eliminate that. Seems that the original program was a one cost covers all and some Advantage programs cherrypicked participants to sign up only the healthiest to minimize costs. The program was then changed to add a risk factor for severity of participants needs. Supposedly, that has been abused by some Advantage programs by getting higher funding for participants with higher risks.
Seems that the other benefits offered such as freebies are not the driver since they are not covered by Medicare.
Again, this is my interpretation of the article (which may or may not be true). I would expect the normal on line experts will be around to correct my interpretation and the source that I found.
I am not a user of Medicare Advantage. I have original Medicare and a Supplement program which also now pays for Gym membership. Supplement payment is now about $160/Month. Gym membership was $55/Month and now is free, covered by the Supplement which is still $160 / Month. Hmm! Wonder where that extra $55 came from. Maybe the theory is that I am heathier and require less medical care