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Friday Alert September 14, 2007
Alliance for Retired Americans
888 16th Street, N.W. - Washington DC, 20006 - (202)
974-8222 - www.retiredamericans.or
GAO Audit Shows Insurers
Benefiting Excessively from Medicare
Advantage
Private insurance companies
participating in Medicare have been allowed to keep tens of
millions of dollars that should have gone to consumers,
according to a new Government Accountability Office (GAO) report
and Monday's New York Times. GAO investigators
said the money could have been used to reduce premiums or
provide additional benefits to older Americans. Moreover,
the Bush administration did not properly audit the companies or
try to recover money paid in error, the report stated.
Under federal law, Medicare officials are supposed to audit the
financial records of at least one-third of the insurance
companies each year. But the investigators said the Bush
administration had fallen far short of that goal and had never
met the statutory requirement. In fact, the proportion of
companies audited by Medicare declined steadily - to 14 percent
in 2006 from 24 percent in 2001 - despite steady growth in
Medicare payments to the plans. In 2003, Medicare audited
49 of the 220 organizations participating in the program.
Auditors found significant errors at 41 companies, but Medicare
officials took no action on the findings. As a result of
the errors, the auditors said, insurers kept "$59 million that
beneficiaries could have received in additional benefits, lower
co-payments or lower premiums." The report did not
identify the companies. "The insurance industry seems to
gain more at every turn," said George J.
Kourpias, President of the Alliance. "If Medicare
officials were to follow the law, and act on the findings of
these audits, older Americans would be a lot better off."
Spending Caps Leading
Patients to Skip Their Medication
Some
seniors stop taking medications for chronic health problems such
as high blood pressure and diabetes when they exceed spending
limits in their prescription drug plans, new research
shows. The study, by the nonprofit research organization
the RAND Corporation, also found that many of those seniors do
not resume taking their prescription drugs when their drug
benefits kick in again at the start of a new health plan
year. The RAND team analyzed prescription drug use from
2003 to 2005 among 60,000 seniors enrolled in a health plan
offered by a large national employer. The seniors were
enrolled in one of three drug plans: one with a spending limit
of $1,000; one with a spending limit of $2,500; and one with no
spending limit. The study looked at the use of drugs to
treat high blood pressure, cardiac problems, diabetes, ulcers,
depression, and prescription pain medications. Reporting
in the Sept./Oct. issue of the journal Health Affairs,
the researchers found that of those who reached their spending
limits, about half went without drug benefits for more than 90
days. Seniors in capped plans who spent the most on drugs
were more likely to discontinue their use of medications than
those in plans with no cap. "The caps are part of a
national health care policy that is penny-wise, pound-foolish,"
said Ruben Burks, Secretary-Treasurer of the
Alliance. "If not taking one's medication leads to serious
consequences and hospitalization, any monetary gain would be
more than offset."
Edward Coyle Speaks Out On
Long Term Care
On Wednesday, Alliance
Executive Director Edward Coyle appeared at a
U.S. Senate Democratic Policy Committee session on long term
care and spoke about the need for action on the issue.
Advocates from the senior, medical and care-giving communities
were all in attendance. Mr. Coyle stated that the future
need for long term care, as well as for care givers, will be
great. He also emphasized, based on recent Alliance
polling, that seniors are worried about the availability of long
term care and fear that long term care needs could wipe out a
lifetime of work and savings. Sen. Debbie
Stabenow (MI) chaired the session. Among those
present were Sens. Harry Reid (NV),
Richard Durbin (IL), Ted
Kennedy (MA), Jay Rockefeller (WV),
Bob Casey (PA), Sherrod Brown
(OH), Jeff Bingaman (NM), Sheldon
Whitehouse (RI), Jon Tester (MT),
Amy Klobuchar (MN), Blanche
Lincoln (AR), Daniel Akaka (HI), and
Ben Cardin (MD), and Gov. Kathleen
Sebelius (KS), representing the National Governors
Association. Ed Scribner, Teamsters
Retiree Director, and Dianna Porter, Alliance
Director of Policy - representing OWL, the voice of Midlife and
Older Women, as a board member - also participated.
More Seniors Continuing to
Work
In analyzing a Census survey released on
Wednesday, The Washington Post called a sharp spike in
the percentage of workers 65 and older "the survey's most
remarkable finding." Nationally, the share of people 65 to
74 who were still working jumped from one in five in 2000 to one
in four in 2006. Many are driven by necessity rather than
choice. Bureau of Labor Statistics data show that the
number of private sector workers eligible for an employer
retirement plan has dropped from 52 percent to 43 percent since
2000, while rising housing costs have cut into workers' personal
savings. Since the early 1990s, employers have also
severely curtailed the health insurance coverage they offer
retirees. On Wednesday evening, the CBS Evening News
reported that the state with the highest percentage of its older
residents still working is South Dakota.
Weems May Hold CMS
Administrator Position Through 2008 Without
Confirmation
Centers for Medicare and
Medicaid Services (CMS) Administrator-nominee Kerry
Weems could hold the job without Senate confirmation
for the rest of President Bush's term following a move by the
White House last week. Although Mr. Weems' nomination is
still pending in the Senate, the president's designation of him
as acting administrator gives him the job indefinitely, with the
same legal authority as if he had been confirmed. "Bush's
action ... appears to all but eliminate the need for the Senate
to carry out its constitutional advise-and-consent role," the
newspaper The Hill reported last Friday. The
Finance Committee held a hearing on Mr. Weems in July but has
not voted on his nomination. Major current issues under
CMS's purview include the reauthorization of the State
Children's Health Insurance Program and substantial changes to
Medicare.
Did You
Know...
U.S. Census Bureau figures indicate
that the population of 100-year-olds living in the U.S. was only
66,000 in 1999. However, by 2050, the Bureau projects that
number to increase to 834,000 (courtesy of the San Diego,
California-area's North County Times newspaper).
Become part of a progressive grassroots movement!
Join the Alliance
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Alliance for Retired Americans 815 16th
St, NW Washington, DC 20006 www.retiredamericans.org
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