We are in parlous times when the state government must set up barriers to protect people from the perfidy of the federal government. That bizarre circumstance came to pass this week when the attorney general and state insurance commissioner announced a program to halt the victimization of elderly people by health insurance salesmen.
Insurance salesmen are persuading elderly Medicare beneficiaries to leave the traditional Medicare program for one of the “Medicare Advantage” policies that the Bush administration urges people to acquire. As Attorney General Dustin McDaniel described it: “These are private insurance companies making money selling policies to people that they do not want, need or understand, and that is wrong.”
People buy the policies with the promise of lower premiums and much better benefits than Medicare and then often discover that their costs are higher and the benefits worse. Their doctor may not even honor the Advantage policy. Since the Republican Congress adopted the Bush plan, which is aimed at eventually dismantling Medicare, about 8 percent of the elderly in Arkansas have switched to a Medicare Advantage plan by a private company. Insurance Commissioner Julie Benafield Bowman said complaints from victimized elderly people have been especially strong from retirement areas like Baxter County.
The attorney general has set up an office to take complaints and advise people about Medicare coverage. The trouble is that, unless someone commits ordinary fraud, such as forging a customer’s name to a policy application, it’s all perfectly legal under the Medicare Modernization Act, which Congress passed late one night in 2003.
The act was the first step toward the privatization of Medicare. It pays insurance companies, with your tax money, to provide medical coverage to the elderly. A Medicare Advantage plan costs taxpayers on average 12 percent more than traditional Medicare, the margin of course covering the insurance company’s profits. The subsidy to the insurance companies amounts to about $50 billion over five years and speeds the day of Medicare’s insolvency. The Medicare administration subtly encourages people to turn to Advantage plans.
Bowman said the plans sound enticing to many elderly people because they may have smaller monthly premiums. But higher co-payments than traditional Medicare make the plans costly to chronically sick people.
Democrats have not done much with their new majority in Congress, but they deserve credit for having some remedy for the Medicare scam. A House bill would roll back the Medicare subsidies to insurance companies and use the $50 billion instead to expand health insurance for children. Bush promised a veto if the bill passed — he wants no more children insured and no insurance company disadvantaged — and Democrats do not have a sufficient majority to overcome the veto.
A remedy will have to await the next election. Meantime, we will have to be content that at least the state’s chief law-enforcement official and top insurance regulator have a sense of duty to the vulnerable.
