For more than 40 million senior citizens, questions about plans to overhaul the nation's health care system come down to one word — Medicare.
Bills being considered in Congress look to cut $400 billion or $500 billion from the growth of Medicare over the next decade. About a quarter of those savings would come from something called Medicare Advantage. It's a popular program that allows seniors to choose privately run health plans that offer all the services covered by Medicare — plus extra benefits like dental and vision care.
Nationwide, about 25 percent of senior citizens are enrolled in Medicare Advantage plans. In Florida, the plans are even more popular — nearly a third of the state's 3 million-plus seniors are enrolled in one plan or another.
"There are no deductibles. There's no 20 percent copay. Traditional Medicare would have deductibles. It would only pay 80 percent and I'd be responsible for the 20 percent," says Bob Goldstein, who is 72 years old and lives in Delray Beach.
Goldstein's plan gives him generic prescription drugs free of charge. And, it pays his membership at a local health club. If he had traditional Medicare, Goldstein says, to have coverage this complete for himself and his wife, he'd have to buy additional "Medigap" insurance. That, he estimates, would cost an extra $5,000 a year.
Fighting Rising Costs
While seniors love it, the government's problem with Medicare Advantage is that it has steadily gotten more expensive. Across the country, the government is now paying, on average, 14 percent more for Medicare Advantage plans than it spends on traditional Medicare.
"It makes no sense," says Marsha Gold, a health care analyst with Mathematica, a policy group. Medicare Advantage plans were created to offer choice for senior citizens and to introduce some competition for traditional Medicare, she says.
"The whole point of this," she says, "was to have a level playing field. Why should you be giving them more money?"
Under the health care overhaul plan being considered in the Senate Finance Committee, more than $100 billion would be cut from Medicare Advantage over 10 years. Democrats see the cuts as a way to slow down the rising cost of Medicare. But opponents say the cuts will force providers to eliminate some benefits to seniors.
Goldstein still works as a pharmacist and says he sees many senior citizens who, like him, are happy with their plans. But, he says, they are worried about what changes may be coming.
"Anything that would hinder that plan could be financially disastrous to them because these people are on a fixed income."
Insurance Companies Rally Resistance
For those seniors who haven't been paying attention to what may be coming for Medicare Advantage, some insurance companies have been working to spread the word. Humana sent a mailer recently to customers warning them that members may lose benefits if Congress makes cuts to the program.
This direct-to-customer lobbying has created its own mini-firestorm. The Obama administration sent a letter to Humana directing it to stop lobbying its customers. That was followed by charges of censorship by Republicans.
Robert Zirkelbach, with the trade group America's Health Insurance Plans, says Humana was just trying to make sure its members knew that Congress was considering cutting money from the program — a move that he predicts would have dire consequences.
"If those cuts are enacted," he says, "seniors are going to experience benefit reductions. They're going to see their premiums increase. And, in some parts of the country, the Medicare Advantage program may go away entirely."
Health care overhaul advocates dispute that assertion. In fact, private providers make big profits from the plans, says Len Nichols, a health care economist with the New America Foundation. He believes insurance companies should be able to operate the plans, and maintain most benefits, without an unfair subsidy from the federal government.
"The plans should be able to deliver the benefits they're giving now at lower cost. The overpayment is going into profit. And that's really what the dispute is about," Nichols says.
A Sympathetic Ear In Congress
Medicare Advantage is an issue that's gotten the attention not just of senior citizens but of members of Congress like Sen. Bill Nelson, a Democrat from Florida.
Nelson is offering an amendment that would preserve Medicare Advantage programs and their benefits in areas where the plans cost the government less than traditional Medicare.
That includes Florida and nearly 1 million Medicare Advantage customers who are Nelson's constituents. Nelson's amendment would add tens of billions of dollars to a health care overhaul. And it would not cover seniors in states like Maine, North Dakota and Oregon — where the government pays more for Medicare Advantage plans than it spends on traditional Medicare. So far, the amendment has been resisted by other Democrats on the Senate Finance Committee. If it doesn't pass in committee, he says he'll offer it on the Senate floor.