Who could have predicted that privatizing Medicare would cost the US Government more money (a lot more) than the old fashioned Big Guvmint way of doing things?
WASHINGTON (AP) — Health insurance companies that serve the elderly and disabled in Medicare are realizing significantly higher profits than they anticipated, resulting in the companies getting $1.3 billion more than projected, congressional auditors say.
Under a program called Medicare Advantage, the federal government pays insurers for delivering Medicare benefits. The insurance companies’ payments are based, in part, on their anticipated revenues and expenses. If the companies had been more accurate, they could have spent much of that $1.3 billion on enhanced health benefits or lower monthly premiums, and they still would have maintained their expected profit margin, the Government Accountability Office said in a report expected to be released Thursday.
The GAO studied the Medicare Advantage program for 2006, the most recent year for which figures were available.
Rep. Pete Stark, D-Calif., who requested the analysis, said the government spends more on beneficiaries when they’re in Medicare Advantage than if they’re in traditional Medicare, about 13 percent more on average.
“This puts to bed this idea the plans are offering tremendous extra benefits with the overpayments,” said Stark, a frequent critic of the program. “The overpayments are going to profits.” […]
The GAO said that Medicare Advantage insurers generated $50 billion in revenue during 2006. On average, plans earned profits of 6.6 percent and they had projected to the federal government that they would earn profits of 4.1 percent.
The insurance plans also spent less covering medical expenses than anticipated, with 83.3 percent of revenue going to medical expenses. They had projected that nearly 87 percent of revenue would go to expenses.
I’m shocked, SHOCKED I tell you, that private corporations have (again) been caught stealing the government blind. Whatever happened to corporate integrity and business ethics? (Please stifle the snickering, people)
Yes, my friends, another Conservative myth about the benefits of letting business handle all our government services evaporates in the harsh light of reality. Though I’m sure the fantasists on the right won’t accept these data points anymore than they accept those regarding the cost of outsourcing military services, the operation of our prisons or private companies which have failed miserably at running school systems. Fiction after all is much more entertaining than non-fiction, and religious faith more comforting than scientific truth. So, don’t worry. I’m sure they already have their excuses ready for why this example of corporate welfare gone bad doesn’t disprove their faith that the Invisible Hand of Ronald Reagan the Free Market is always the only answer to everything.
