In December 2021, Jessie Hellmann, a politics reporter, wrote about how the Medicare Advantage program survived cuts that health policy experts were considering to help pay for the cost of adding dental, hearing and vision coverage to the federal Medicare program last summer.
Having Medicare add coverage for these ancillary benefits was among the proposals included in President Joe Biden’s multi-trillion-dollar social spending plan that became part of what was called the Build Back Better legislation, she wrote. To free up the funds to pay for dental, hearing and vision coverage, lawmakers and policy experts suggested cutting federal funding to health insurers that run Medicare Advantage plans.
Based in Washington, D.C., Hellmann has covered the politics of health care and Health Policy since she joined Modern Healthcare in March 2021. Before working for the Chicago-based weekly news magazine, she covered health care for The Hill.
Her article, “How the insurance lobby got Congress to love Medicare Advantage,” is a guide for any journalist covering efforts in Washington to add benefits to the Medicare program, to reform the health care system or to cut what the government spends on Medicare Advantage (MA).
Almost as soon as the idea was proposed to add dental, hearing and vision and cut funding for Medicare Advantage, “… it was off the table,” wrote Hellmann, an AHCJ member.
“Industry groups aired millions of dollars in television advertisements warning seniors that Washington was ‘messing with’ their health care and urging them to contact members [of Congress] and tell them ‘please don’t cut Medicare Advantage,’” she explained.
For this “How I did it”, we asked Hellmann how she got the idea for her article on the insurance lobby and how she did the reporting.
“For anyone who pays attention to Congress, it was clear what was happening,” she said. “But not everybody pays attention.”
The need for this story became obvious when the insurance industry began running advertisements in the Washington area that were impossible to ignore. “Basically, the ads from the insurance industry were telling lawmakers not to cut Medicare Advantage,” she said. “In the ads, they had seniors who were Medicare Advantage beneficiaries telling other beneficiaries that Congress was considering cutting the Medicare Advantage program.”
An experienced reporter who has covered health care policy in Congress since 2017, Hellmann said the ads struck her as being somewhat misleading. “I didn’t know what they were talking about in those ads because I hadn’t heard of anyone actually proposing cuts to Medicare Advantage,” she said.
For her article, she interviewed policy experts who explained that some parts of the proposal involved making changes to MA to cover the costs of adding the ancillary benefits to Medicare. “From what I could tell, that was enough for the industry to almost freak out about this possibility that changes could be made,” she said. The result was the advertising barrage.
“That got me thinking about the power of the insurance industry and how much money they have to head off any potential changes even when those changes didn’t even seem likely to move forward,” she explained.
The ads ran on television, social media and on music-streaming services. She even heard one while listening to a true-crime podcast. “That just seemed so random because I’m not exactly the target audience for that kind of ad,” she commented.
One source told her that the health insurance industry and its supporters have a strategy of playing strong offense as early as possible against any proposal that could result in federal cuts to MA spending. One of those supporters is the Better Medicare Alliance, a coalition of health insurers and health care providers that calls itself the leading research and advocacy organization supporting Medicare Advantage.
Even when there are only rumors something might happen, the alliance and other health insurance groups warn lawmakers that MA is popular among consumers in their districts, Hellmann wrote.
Lobbying helped the insurance industry gain the support of Sen. Krysten Sinema (D-Ariz.), Sen. Tim Scott (R-S.C.) both of whom vowed to “protect MA from payment cuts” and from Sen. Joe Manchin (D-W.Va.). Provisions to add dental and vision were cut from the Build Back Better legislation and the law itself failed to pass the Senate after the House had passed it earlier.
“This is the power of the insurance industry in action,” she wrote. “Medicare Advantage carriers especially have eluded scrutiny from Congress in recent years, even as government watchdogs, Medicare experts and the Justice Department have grown increasingly alarmed about problems they see with the program.”
To her credit, Hellmann included comments from health policy experts who recognize that the government has been overpaying MA plans since the program began as Medicare+Choice in 1997. Since then, MA plans have been gaining new members annually so that half of all Medicare beneficiaries are expected to be in private MA plans by 2030, she wrote.
Among the groups that have criticized the MA program are the Medicare Payment Advisory Commission (MedPAC), which advises Congress. MedPAC has long raised questions about whether the program is a good value for taxpayers, she wrote. In June, the commission said Medicare Advantage has never saved the government money, she added.
Also, she interviewed Donald M. Berwick, M.D., M.P.P., F.R.C.P., the former administrator of the federal Centers for Medicare and Medicaid Services (CMS) who recently co-authored a two-part article for Health Affairs about what the authors called the “perverse MA business model.”
“This business model is distorting health care delivery, creating excessive costs for taxpayers and Medicare beneficiaries, draining the Medicare Trust Fund, obstructing the badly needed value transformation of American health care, and diverting the money needed to fund other social services and goods,” wrote Berwick and co-author Richard Gilfillan, M.D., M.B.A., a former deputy administrator at CMS.
For Hellmann’s article, Berwick said, “The outpouring of lobbyist-driven pressure on Congress is really quite enormous, and that makes Medicare Advantage very politically difficult to change, even though this is money that could, if recovered, be used for many other purposes.”
Hellmann also made the point that MA plans have increased revenue by using risk adjustment to make patients appear to be sicker than they are so that the MA plans can collect more from CMS because they’re supposedly caring for sicker patients.
After CMS made billing data available last fall, researcher Richard Kronick, a professor at the University of California San Diego, analyzed MA billing data to show that Medicare overpaid the nation’s private MA plans more than $106 billion from 2010 through 2019 because of the way the plans charge for sicker patients, according to reporting in NPR by Fred Shulte of Kaiser Health News.
