Seniors, disability advocates say private Medicare puts profits above care

The first half of a longer story by The AP:

MIAMI — Cecile Sangiamo liked her health insurance — until she needed to use it.

The 72-year-old Clearwater, Fla., resident had been on the federally subsidized, privately run Medicare Advantage policy through WellCare Inc. for about three years when she started having pain that made it hard to walk.

Her doctor's referral to an orthopedic specialist was denied by the insurer. Her out-of-pocket costs were higher than she was initially told. And when Sangiamo needed surgery, she said, WellCare offered some unexpected medical advice.

"Take pills and use a walker," Sangiamo remembered being told by the insurer, which declined to comment on the case. "I wanted to say, 'I'll take the walker and bang you in the head with it.'"

Seniors have flocked by the millions to Medicare Advantage, privately run plans offered as an alternative to traditional, government-run Medicare. Programs that promise lower premiums or other perks have combined with heavy marketing from insurance companies to make the programs double in size in the last six years to nearly 11 million members and growing.

But critics say that Sangiamo's case is all too common and that the plans put profits above care and denials of service are routine.

Profits at the insurers offering Medicare Advantage have far outpaced expectations, and their expenses to treat clients have been far lower than projected.

Advantage insurers are required to offer perks beyond traditional Medicare, such as gym memberships or hearing aids. Enrollees also often get care coordination among the many doctors an older person might have. But there is no standardization of the thousands of plans seniors can choose from, and co-pays and premiums vary widely.

In the debate on overhauling the U.S. health care system, Advantage has been criticized as an example of a broken system that costs too much, confuses enrollees and suffers from a lack of oversight.

Government payouts for Advantage of $111 billion a year and, on average, 14 percent more per patient than traditional Medicare have made the plans a key target for lawmakers and President Barack Obama, who has cited it frequently as too costly.

Proponents of Advantage and the many seniors who like their coverage hail its added benefits and care coordination. But even many backers acknowledge one of its toughest problems is few seniors understand the essential difference in private plans: Even services covered by traditional Medicare that doctors deem medically necessary routinely need the insurers' advance approval and are sometimes denied.

"There are so many hoops to run through, there are so many rules, it's just mind-boggling," said Mary Johnson, policy analyst for The Senior Citizens League, a nonpartisan, 1.2-million-member group. "Woe is you if you have any kind of chronic problem, and woe is you if you're ever hospitalized."

Participants have been denied visits to specialists, rehabilitation to help them walk again and countless other services they'd be entitled to under traditional Medicare.

"Every decision is based on not what's right for the patient, but what's right for the bottom line," said Dr. Michael Sedrish, who coordinates HMO payments for Medisys Health Network, which runs three New York City hospitals.

Everyone over 65 and many disabled people qualify for Medicare. Private plans, paid for by the government but run by private insurers, were added in the 1970s to give added choices in coverage.

In 2003, the government added lucrative subsidies for insurers, now totaling more than $15 billion a year. Many more companies got into the business, with massive marketing efforts, and enrollment went from 5.3 million in 2003 to more than 10.7 million in July.

With basic Medicare, seniors generally know what sort of coverage they're getting. That's not the case with the roughly 7,000 Medicare Advantage plans, where one person's coverage could be completely different from a next door neighbor's.

Another notable difference between traditional Medicare and Advantage plans is that the vast majority of traditional Medicare denials come after treatment, when the doctor or hospital is fighting to get paid. Advantage denials sometimes come before treatment, delaying it or preventing it.

The Centers for Medicare and Medicaid Services acknowledges having more data on what services patients are getting and what ones are denied would be beneficial, but it is complicated by the sheer number of plans.

"It's a pretty daunting task," said Tony Culotta, Medicare's director of enrollment and appeals, "but it's something that we're working toward."