Editorial Urges Federal, State Agencies To Curb Medicare Advantage Plan Abuses, Eliminate ‘Unjustified Subsidies’

Many Medicare Advantage plans "are continuing to prey on elderly Americans despite state, federal and industry efforts to stop them," which is "yet another reason to rein in these operations by eliminating their unjustified subsidies," a New York Times editorial states. The editorial says that these private MA plans are "an ethical horror" and "a financial drag ... as the government pays them about 12% more, on average, than the same services would cost in the traditional Medicare program."

The editorial notes that under business practices recently examined by the Times, "unscrupulous insurance agents have tricked people into dropping traditional Medicare coverage and enrolling instead in private plans that do not meet their needs." It continues, "Although federal officials claim the number and severity of sales abuses have declined, they remain a dark stain on the ethical performance of private plans."

The editorial concludes, "Federal and state agencies need to redouble their efforts to root out abuses, and Congress ought to eliminate the unjustified subsidies that give private plans a competitive advantage over traditional Medicare" (New York Times, 12/26/07).