Medicare’s cost, coverage

Medicare, the federal health insurance program for 57 million people ages 65 and over and younger people with permanent disabilities, helps to pay for hospital and physician visits, prescription drugs and other acute and post-acute care services.

Medicare plays a major role in the health care system, accounting for 20 percent of total national health spending in 2015, 29 percent of spending on retail sales of prescription drugs, 25 percent of spending on hospital care and 23 percent of spending on physician services.

In 2016, spending on Medicare accounted for 15 percent of the federal budget.

Source: observed. “They are trying to create their own exclusive medical facilities to create profit for their own parent companies.”

Kimberly Ware, who does consulting work in Nevada as a Medicare educator, agreed, calling Southwest’s action toward Medicare patients a legal form of extortion.

“The bottom line is pay up for Medicare Advantage and go on with your doctor or don’t pay up and don’t come back to us anymore.”

Company cites ‘better health outcomes’

In a statement, Southwest reported it made the change because “Medicare Advantage plans are better for our patients, with better coordinated care and better health outcomes.” It declined comment on whether the change would benefit its bottom line.

Research is divided on whether Medicare Advantage plans do produce better outcomes.

A 2016 study published by the National Bureau of Economic Research found that those who leave Medicare Advantage for traditional Medicare are more likely to suffer a preventable hospitalization or readmission to hospitals.

But a report released this spring by the Government Accountability Office found that people who are sicker sometimes drop out of the Advantage plans, citing difficulty getting access to “preferred doctors and hospitals.”

The GAO reviewed 125 Medicare Advantage plans and found that 35 of them had disproportionately high numbers of sicker people dropping out. The GAO said this data shows a need for more government oversight of Medicare Advantage plans.

Stephen Zuckerman, a senior fellow at the liberal Urban Institute think tank, said he would “absolutely assume” a health care provider such

MEDICARE

as Southwest decided to abandon traditional Medicare patients for “financial benefit.” He said a lack of transparency by providers makes it hard to know how extra profits could be realized, though he noted that Advantage plans require “less-complicated administration.”

According to Kaiser Family Foundation statistics, 35 percent of all Medicare beneficiaries in Nevada are enrolled in Medicare Advantage plans, with the percentage even higher — 40 percent — in Clark County. Today, 46 percent of all Medicare Advantage enrollees in Nevada are in plans operated by Unitedhealthcare.

Kirk Miller, chief operations officer of Healthcare Partners Nevada, said the company is already hiring more doctors and will accelerate that if a large number of Southwest patients change providers.

Zarate, who buys Medigap insurance to cover costs that her traditional Medicare doesn’t pay, including copayments and deductibles, said she plans to switch.

“How they did this wasn’t right at all — we don’t have a lot of time to really check out all our options,” she said of Southwest. “So I’m going to see what Healthcare Partners has to offer. Both my husband and mother like it, so I’ll check it out.”

Contact Paul Harasim at pharasim@reviewjournal.com or 702 387-5273. Follow @paulharasim on Twitter.