Disadvantages of Medicare Advantage

Medicare Advantage was a way of channeling Medicare dollars into private for-profit companies before Direct Contracting Entities or the ACO/REACH program. Medicare Advantage programs require that 85% of income be spent on patient care. The remaining 15% can go to administrative expense or profit. By decreasing patient care spending, the companies can increase their profit.

This has become a profitable mechanism for pulling money away from patient care and into the hands of investors. The MA programs are advertised on television and other media, with famous individuals describing the wonderful care and extra perks they receive. The extra perks (health club memberships, etc) are possible because the MA plans cherry pick (manipulate the system so they choose the healthier individuals) and lemon drop (manipulate the system to drop patients who are sicker and more expensive.)

In August, 2022 CMMS issued a request for comments about the Medicare Advantage Program. Click on the link below to read the letter that PNHP President Dr Susan Rogers sent to CMMS. It is an excellent explanation of what is wrong with MA and the entire program for the privatization of Medicare.