Some in Congress propose to help pay for part of health care reform by cutting government contributions to a private insurance program called "Medicare Advantage."
Under Medicare Advantage, insurance companies get federal money and create private health plans that offer more choices of services to Medicare customers, such as dental and vision coverage. In exchange, many of the plans resort to money-saving measures like restricting clients' ability to choose their own doctors.
But the dark side of Medicare Advantage is that the government spends about 14 percent more per senior citizen than for those enrolled in traditional Medicare, which is run directly by the federal government. That's a fairly recent development that should be reversed. A GAO study of 2007 Medicare Advantage plans found that most of the plans allocate less than 85 percent of revenues to medical expenses, with the rest going to administration, marketing, sales and profit.
Most of that non-medical money can be better spent on health care reform.
When Medicare Advantage began decades ago, the government paid a bit less for the private plans than for traditional Medicare, says David Certner, legislative policy director of AARP in Washington, D.C.
In 2003 Congress deliberately set up a higher payment system because it wanted to boost enrollment in these private plans, Certner said.
To read the complete editorial, visit The Anchorage Daily News.