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Too Good to Be True: The Fine Print in Medicare Private Health Benefits

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Publication Date: April 2007

Publisher(s): Medicare Rights Center

Topic: Health (Health care financing)

Type: Report

Coverage: New York


Nearly 8.3 million of the 43 million Americans with Medicare receive their medical care through private insurance companies, also called Medicare Advantage (MA) plans. The government pays the private insurance companies between 12 and 19 percent more than it would cost Medicare to serve the same people, according to the Medicare Payment Advisory Commission (MedPAC), a nonpartisan, independent federal body that advises the U.S. Congress on issues affecting the Medicare program.

The non-partisan Congressional Budget Office estimates that the government's cost for these extra payments will amount to $65 billion over the next five years.The Bush administration and its supporters in Congress claim the extra money is a good investment because private insurers offer more generous benefits than Original Medicare.

The experience of the Medicare Rights Center (MRC) helping people with Medicare get the health care they need shows that private health plans often fail to deliver what they promise. Plan members encounter an obstacle course when trying to get care and coverage, and they may pay more out of pocket costs than what they would have in Original Medicare.

This report, based on the thousands of calls for assistance received by MRC's counselors and caseworkers, provides a unique view into the human consequences of how private health plans operate.