Chuck Dives Into the Medicare Advantage Muck — in the Name of ‘Policy Stability’
Senator Chuck Schumer, along with 21 Democrats and 40 Republicans have signed onto a glowing letter boosting the further privatization of traditional Medicare health insurance coverage. Photos by Bob Hennelly
By Bob Hennelly
A bi-partisan group of 40 Republicans and 21 Democrats led by Senate Majority Leader Chuck Schumer (N-NY) has just signed onto a glowing letter endorsing Medicare Advantage — the increasingly controversial profit-driven health insurance program that now enrolls some 32 million seniors and individuals with disabilities nationwide.
In the Jan. 26 correspondence to Chiquita Brooks-LaSure, administrator for the Centers for Medicare and Medicaid Services [CMS], the senators urge the agency, which oversees and funds the program, to “ensure payment and policy stability for the Medicare Advantage program, to protect and strengthen this critical choice for current and future Medicare beneficiaries.”
In their letter boosting health insurance privatization, the 61 Senators do reference their desire to work with CMS to “combat predatory and deceptive marketing practices, improve the accuracy of provider directories, and increase transparency of plan performance to help consumers and taxpayers better assess value.”
But the letter also insists Medicare Advantage “allows plans to focus on prevention and care coordination, resulting in better health outcomes. Additionally, the program supports an increasingly diverse population with varied health and socioeconomic backgrounds, including a growing number of Americans in minority and rural communities. In addition, the design of the Medicare Advantage program enables plans to address health-related social needs of such populations like food insecurity or lack of transportation, enhance the focus on primary care, and provide access to telehealth services and in-home care.”
Evidence to the contrary, however, indicates that Schumer and the rest of the senators may have missed some troubling trends in attempting to put a rosy face on Medicare Advantage.
Those fighting back against the Medicare Advantage push nationwide insist the profit-driven plans overcharge the federal government billions of dollars, while inflating the bottom lines of health insurance companies who profit off of delaying and denying care — something that has been documented by the Department of Health and Human Services Office of the Inspector General.
Back in October, reporting for NBC News, Gretchen Morgenson reported “CEOs of rural nonprofit hospital systems in Arkansas, Colorado, Mississippi, Missouri, South Dakota and Texas told NBC News that Medicare Advantage plans repeatedly refuse to reimburse them for the care they provide. Some 170 rural hospitals are at risk of closing in those six states alone, according to a report from the Center for Healthcare Quality and Payment Reform, a nonprofit advocacy organization.
The Democratic Party signatories to the Medicare Advantage letter include, Sen. Catherine Cortez Masto, Sen. Gary C. Peters, Sen. Alex Padilla, Sen. Angus S. King, Jr., Sen. Kyrsten Sinema, Sen. John Fetterman, Sen. Charles E. Schumer, Sen. Jacky Rosen. Sen. Mark Kelly, Sen. Mark R. Warner, Sen. Amy Klobuchar, Sen. Jon Tester, Sen. Michael F. Bennet, Sen. Martin Heinrich, Sen. Thomas R. Carper, Sen. Jeanne Shaheen, Sen. John Hickenlooper , Sen. Margaret Wood Hassan Sen. Robert P. Casey, Jr, Sen. Joe Manchin III, and Sen. Tammy Duckworth.
The Republican Party signatories, meanwhile, include, Sen. Tim Scott, Sen. Shelley Moore Capito, Sen. John Barrasso, M.D, Sen. Thom Tillis, Sen. John Cornyn, Sen. Rick Scott, Sen. Bill Cassidy, M.D., Sen. James E. Risch, Sen. Joni K. Ernst, Sen. Steve Daines, Sen. Kevin Cramer, Sen. John Thune , Sen. James Lankford, Sen. Markwayne Mullin, Sen. Marsha Blackburn, Sen. John Boozman, Sen. Mike Braun, Sen. Katie Boyd Britt, Sen.Tedd Budd, Sen. Tom Cotton, Sen. Ted Cruz, Sen. Deb Fischer, Sen. Lindsey O. Graham, Sen. Bill Hagerty, Sen. John Hoeven, Sen. Ron Johnson, Sen. John Kennedy, Sen. Cynthia M. Lummis, Sen. Rand Paul, M.D., Sen. Pete Ricketts, Sen. Mitt Romney, Sen. Marco Rubio, Sen. Eric S. Schmitt, Sen. Tommy Tuberville, Sen. Todd Young, Sen. Susan M. Collins, Sen. JD Vance, Sen. Roger F. Wicker, Sen. Mike Crapo, and Sen. Josh Hawley.
Marianne Pizzitola and other advocates for traditional Medicare take the fight to Washington, DC last year.
The health care insurance industry spends millions on lobbying Congress. A 2021 research study found that a third of the members of Congress “held health care-related assets. These assets were often substantial, with a median total value per member of over $43,000.”
In 2021, David Moore reporting for Sludge reported that the health insurance and pharma lobbyists had maxed out to Congressional Democrats.
“So far this year, the insurance industry has donated more than $312,000 to the campaign of Majority Leader Chuck Schumer, according to figures from OpenSecrets, as well as over $76,000 and $50,000 to the fundraising committees of Sinema and Manchin. Sen. Maggie Hassan of New Hampshire, who is up for reelection next year, has received almost $90,000 from the industry this cycle, the third-highest amount among Democrats,” Moore reported.
The CMS correspondence is a major political boost for the for-profit insurance industry which rakes in billions of dollars off of Medicare Advantage, but just last year found itself on the ropes and unable to cajole a similar support letter from the House of Representatives as it had in past years.
Republican Minority Leader Mitch McConnell and Sen. Kristen Gillibrand (D-NY), as well as New Jersey Democratic Senators Cory Booker and Robert Menendez, and Connecticut’s Democrats Sen Chris Murphy and Sen. Richard Blumenthal passed — were all missing from the list of U.S. Senate Medicare Advantage boosters.
In 2023, the private health insurance industry sector was rocked by a series of explosive stories in the New York Times and Kaiser Health News that raised alarming questions about the largest Medicare Advantage insurers with reports of widespread fraud and denial of care, which resulted in 10,000 deaths and billions in fraudulent overcharges. The news outlet confirmed that the insurers were on the radar of regulators who had documented a sector-wide practice of so-called “upcoding” when insurers would say patients were sicker than they were to secure a higher reimbursement from the government — while also using prior authorizations, as well as outright denials of treatment to reduce their costs by rationing care.
Last May, Sen. Blumenthal (D-CT), chair of the Senate Permanent Subcommittee on Investigations, held hearings into the under-reported nightmarish experiences of seniors who were enrolled in Medicare Advantage plans but could not access necessary care. The oversight hearings were a follow-up to a devastating April 2022 report from the Department of Health and Human Services Office of the Inspector General report that documented Medicare Advantage plans were routinely denying coverage for medical services that would have been covered under traditional Medicare.
“We found that among the prior authorization requests that MAOs denied, 13 percent met Medicare coverage rules — in other words, these services likely would have been approved for these beneficiaries under original Medicare (also known as Medicare fee-for-service),” the DHHS IG concluded.
“Medicare Advantage insurers are required to provide beneficiaries with the same minimum level of coverage as traditional Medicare, and yet we’ve seen evidence indicating that in many instances, they are failing to do so. In fact, failing entirely because they are denying or delaying care,” Blumenthal said in his opening remarks. “And tragically, we’ve heard from many families who faced denials in the middle of major medical crises, forcing them and their loved ones to fight even as they are fighting for their lives. And the fight for insurance coverage is detracting from the fight for their health. And perhaps most troubling of all, there is growing evidence that insurance companies are relying on algorithms rather than doctors or other clinicians to make decisions to deny patient care.”
Blumenthal cited the DHHS IG’s report findings that “identified a large number of instances where Medicare Advantage companies refused to authorize treatment for care that clearly met Medicare coverage requirements. In one case, a cancer patient had a common scan needed to determine if the disease had spread, delayed by their insurer for more than a month. In another, an insurer refused a walker to a 76-year-old patient. The insurance company argued that this patient had been provided a cane within the past 5 years and therefore didn’t need a walker.”
The Subcommittee on Investigations heard “from patients and providers alike who have stories of care being delayed or denied. And many of these stories are patients who have been hospitalized for serious medical issues and who need nursing home or rehabilitative care before they’re ready to return home. These denials have become so routine that some patients can predict the day on which they will come.”
Patient advocates told the Senate panel that while working through the various appeals process for denials, they also uncovered internal industry documents that the decisions on what care was approved or denied was not being done by clinicians — but by algorithms.
The panel heard heartwrenching testimony from Gloria Bent, the widow of Gary Bent, a retired and beloved University of Connecticut physics professor who died in March after his Medicare Advantage insurer, using an algorithm and artificial intelligence, denied him access to skilled nursing and acute therapy that had been prescribed by his neurosurgeon. Bent was 82.
“Why are people who are looking at patients only on paper making decisions that override or deny the services that are judged necessary by health care providers who know their patients, are interacting with them in person and in some cases have been working with them for months or for years?” Gloria Bent asked the panel. “We hope that the result of this hearing will be real change in the ways decisions are made about the services managed Medicare patients receive, that providers will drive the decisions and that the primary goal will always be to provide the best possible care for the patient. We want no other family to have the heartbreaking experience we did.”
The New York City Organization of Public Service Retirees (NYCOPSR) continues to figh a plan by the Municipal Labor Committee [MLC] and the City of New York to push 250,000 municipal retirees out of traditional Medicare and into a profit-driven Aetna Medicare Advantage plan, so the city can pocket an alleged $600 million annual windfall. With some 50,000 members in its growing ranks, NYCOPSR’s multi-faceted campaign against the Medicare Advantage push insists that the privatization scheme means the degradation of the healthcare coverage retirees — many of them 9/11 first responders and survivors — were promised while on the job.
The advocacy group has been most successful in the New York State Courts where they have won several initial rounds in the protracted litigation. Meanwhile, it’s been less successful in the City Council where Speaker Adrienne Adams [D-28th Distirct] has aligned herself on the side of the city’s biggest public unions like DC 37 and the UFT who are boosters of the Aetna plan as they moved to close contracts for current workers. Retirees also have legislation pending in Albany which would prohibit municipal and county governments from diminishing retirees health benefits after they retire.
“We have been hearing from retirees from all over New York state and throughout the country who are facing a similar challenge where they were promised as active employees that they would have Medicare in retirement with a supplement — and now, sometimes years into their retirement — they are being forced into these inferior and predatory Medicare Advantage [plans],” Marianne Pizzitola, a retired FDNY EMT and president of NYCOPSR, told Work-Bites during a phone interview.
In July, NYCOPSR was given a hero’s welcome at a ‘Save Medicare’ rally in front of the U.S. Capitol. Roughly 70 members shared the spotlight with Sen. Elizabeth Warren [D-MA], and several other members of the House of Representatives who blasted for-profit Medicare Advantage insurance companies for delaying and denying health care treatment to seniors.
“This year, for the first time more than half of all beneficiaries are enrolled in Medicare Advantage instead of traditional Medicare,” Sen. Elizabeth Warren told the large crowd in front of the Capitol. “Medicare Advantage substitutes private insurance companies for traditional Medicare and that private coverage is failing with Medicare beneficiaries and taxpayers. It’s all about the money. Private insurers are in Medicare Advantage to play games to extract more money from the government. Experts estimate the Medicare Advantage insurers will receive more than $75 billion in over payments this year alone.”
“We’ve been fighting the City of New York and, unfortunately, our former unions who were sold by insurance companies,” Pizzitola told the Capitol crowd. “Telling them they can give us free insurance, and they would benefit from the savings, thereby, forcing us into Medicare Advantage, and taking us out of our Medicare and our city supplemental plan. We are here today, not only to expose all of the issues with prior authorizations and wrongful delays and denials of care — we are also saying that employees that have served the city or their union — or any employer in whatever city from sea to shining sea — should not be forced into a Medicare Advantage plan. We earned our Medicare, and we want to be in Medicare.”
Pizzitola introduced Rep. Rosa DeLauro (D-CT), who thanked Pizzitola for her “very strong voice” in the national fight against the increasing privatization of Medicare.
“Access to basic quality health care is one of the most important issues that face our nation today — that’s why it’s time to call out the so called Medicare Advantage for what it is. It’s private insurance that profits by denying coverage and using the name of Medicare to trick seniors,” DeLauro told the crowd.
DeLauro referenced the New York Times investigation into the entire Medicare Advantage sector.
“Eight of the 10 biggest Medicare Advantage insurers — representing more than two-thirds of the market — have submitted inflated bills, according to the federal audits,” the Times reported last year. “And four of the five largest players — UnitedHealth, Humana, Elevance and Kaiser — have faced federal lawsuits alleging that efforts to over diagnose their customers crossed the line into fraud.”
“The fifth company, CVS Health, which owns Aetna, told investors its practices were being investigated by the Department of Justice,” according to the newspaper.