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Originally Posted by Aces4
Yes and the old adage, "It was fun while it lasted", comes to mind. One wonders how much of this is going on all over the country.
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This kind of reminds me of the whole mortgage disaster, but on a different scale. In both cases, industry regulators created a moral hazard that provided the opportunity to make lots of money despite knowing the whole thing was a house of cards that would eventually come tumbling down. With subprime mortgages, the government wanted everyone to be able to own a home regardless of their financial capacity to actually repay the loan. Government guaranteed mortgages, coupled with significantly relaxed underwriting standards, created a moral hazard which allowed people to buy homes (or more expensive homes) than they could reasonably afford. Wall Street knew the loans were bad, but they didn’t care, they were making a fortune in the mortgage business and were all in. With Medicare Advantage plans, the moral hazard is the government (CMS) making risk-adjusted payments per MA patient, incentivizing upcoding to receive greater payments. In both cases, the opportunity to make lots of money now, despite knowing it’s not necessarily the right thing to do, wins out. Hence the term “moral hazard”. It’s a game of musical chairs, where everyone wins (except for taxpayers), right up until when the music stops playing.