Taxpayers spend 22% more per patient to support Medicare Advantage

Original Article ↗ Hacker News Discussion ↗

Medicare Advantage and Overpayment

  • Several commenters frame Medicare Advantage (MA) as a mechanism to siphon public Medicare funds into private insurers’ profits.
  • A cited MedPAC report: MA benchmarks ≈132% of what traditional fee‑for‑service (FFS) would spend on the same patients; plan bids ≈101% of FFS, with ~14% of bids going to admin and profit.
  • Conclusion from that report: MA’s lower medical costs vs FFS are offset by administrative costs and profit; most “extra benefits” are effectively funded by taxpayers, not true efficiency. Estimated overpayment ≈22 percentage points, or ~$83B in 2024.

Public–Private Partnerships and Corporate Profiteering

  • One camp argues most federal public‑private partnerships are “elaborate graft” enriching the wealthy, with Medicare Advantage as a prime example.
  • Others counter that not all PPPs are toxic, citing successful education/DoL programs, but agree healthcare PPPs are highly vulnerable to abuse and fraud.

US Healthcare System Problems

  • Strong sentiment that US healthcare is unusually expensive with worse outcomes (life expectancy, maternal/infant mortality, untreated conditions) compared to other rich countries.
  • Debate on causes: some blame regulation; others blame inability of public payers (Medicare/Medicaid) to negotiate prices widely; others emphasize limited providers and expensive technology.
  • Disagreement over how inaccessible US care is: some say “most Americans don’t have access”; others note EMTALA guarantees emergency care but concede major access gaps, especially in rural areas and non‑emergency care.

Comparisons to Foreign Models

  • Mentioned models: UK/Italy (nationalized), Germany (mandatory insurance with highly regulated public system plus optional private), and universal single‑payer more broadly.
  • Some prefer Germany’s regulated private model; others argue US political culture can’t be trusted with such a hybrid and should move to more fully public systems.
  • One commenter notes UK‑style rationing can feel utilitarian/nihilistic; others accept wait times as a worthwhile tradeoff for lower national costs.

Reform Proposals and Extremes

  • Moderated proposals:
    • Allow broader Medicare/Medicaid negotiation of prices.
    • Decouple insurance from employment, possibly via public funding and universal basic coverage.
    • Tighten profit caps for insurers (noting ACA’s 80% medical loss ratio already pushed some efficiencies).
  • More radical proposals:
    • End privatization of healthcare, nationalize providers/facilities, forgive medical student debt, and tightly allocate care using quality‑of‑life‑year metrics.
    • Critics argue these “all‑in” plans are impractical, under‑specified, and ignore complex edge cases (cosmetic care, cruise‑ship doctors, auxiliary staff, non‑mainstream therapies).

Politics, Elections, and Project 2025

  • Some link MA expansion to conservative policy blueprints (e.g., Project 2025) and warn of a push to make MA the default, causing a “death spiral” for traditional Medicare.
  • Others stress that election results do not demonstrate a clear public mandate for healthcare privatization; many voters strongly support Medicare, Medicaid, ACA.

Public Sentiment, Attention, and Escalation

  • Several commenters are pessimistic about sustained political attention, citing short media cycles and entrenched capital interests.
  • Others argue anger is already intense, referencing public reaction to a healthcare CEO’s assassination and growing hostility toward healthcare corporate leaders.
  • Disagreement remains over whether such events will translate into organized reform or remain isolated expressions of rage.

ACA and Employer‑Tied Insurance

  • ACA is praised for giving coverage options to people outside large employers and for income‑based subsidies and profit caps.
  • Some propose:
    • Let everyone choose ACA plans even if they have employer coverage, with employers contributing what they would have paid to group plans.
    • Ultimately break the employer–insurance link while maintaining or expanding ACA‑style public marketplaces.