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A New Medicare Program Threatens Seniors. We Can Stop It.

  • Credibility:

There is a stealthy menace threatening all seniors on traditional Medicare. It’s called the Medicare Direct Contracting program (MDC), and it threatens to privatize the publicly guaranteed health care everyone has paid into since they first got a paycheck.

In brief, under MDC the government contracts with for-profit entities and agrees to pay them a negotiated amount per beneficiary, telling them that what they don’t spend on the beneficiary, they can keep. What’s so worrisome about that, you may ask? We already have privatization in Medicare Advantage plans, in which insurance companies manage the care of seniors and get paid a per person fee by Medicare. About 43 percent of seniors are on Medicare Advantage, which means that for them, Medicare is already privatized. So what’s the big deal?

The big deal is this: While Medicare Advantage plans approach and try to sell you, so-called Medicare Direct Contract Entities (MDEs) approach your doctor’s practice and try to sell them, offering hefty financial incentives. One of them, Clover Health, here in New York, promises your doctor a 40 percent increase in income and profit sharing. So, for instance, if your doc refrains from ordering a procedure for you, he gets to share in the “savings” (i.e., profit) he’s just made—at your expense—for the corporation. Thus tempted, your doc may well sign on the dotted line, and then whatever terms they agree to govern you as well—but without your explicit permission. All you’ll get is an innocuous note saying you are now “aligned” with the practice’s corporate partner. Signed, sealed, delivered—you’re theirs.

Currently, MDC is a pilot program, and hundreds of thousands of seniors across the US have been signed up without their full knowledge or consent. It began under the Trump administration, and while President Biden paused a model that would subject entire regions to this approach, he has allowed the rest of the program to continue unabated.

Perhaps worst of all, any entity with money (a hedge fund, for example) can apply to be in this game. The governing motive, after all, is profit. And there’s a lot of money to be made. So much, in fact, that Medicare has had to halt applications for a while: Too many have already lined up like pigs at the trough. And why shouldn’t they? After all, the government has changed the rules so that governing boards of these new entities need have no more than 25 percent medical providers—which can mean that crucial medical decisions may be made not by your doctor, but by some bean counter.

All of which brings me to the big similarity between Medicare Direct Contracting and Medicare Advantage: the ways in which they maximize profit at the government’s expense, and yours. For one, they game the system and represent you as sicker than you are by “up-coding,” which lets them collect more dollars per patient than are warranted—so much more, in fact, that the Medicare Trust Fund will be bankrupt in 2025. Then, to further maximize profits, they find ways to spend as little on you as they can get away with.

Traditional Medicare has a 2 percent overhead. Medicare Advantage plans have an 18 percent overhead, with huge profits pocketed by executives and shareholders. They get away with it by limiting care and shaving overall Medicare spending. MDC is poised to do the same, on an even bigger scale.

There are efforts to stop MDC in its tracks. Representative Pramila Jayapal of the Seattle area has written a letter to Health and Human Services Secretary Xavier Becerra. More than 50 other Representatives have signed on to it. However, our local congressman, Representative Antonio Delgado, has not signed. I did hear him claim, in one of his Town Hall meetings, “I do not, nor will I ever, support the privatization of Medicare,” and he did repeat this claim on an elaborately reproduced letterhead emailed to me and the hundreds more of his constituents who have questioned him on the matter. He can repeat that claim till the cows come home, but so long as he resists denouncing the MDC Program by joining Jayapal’s protest, he is tacitly supporting it.

I urge you to call the Capitol Switchboard at (202) 224-3121, and ask to be connected to the office of Delgado or whoever is your congressional representative; tell them to please sign on to Rep. Jayapal’s letter demanding that Medicare Direct Contracting be stopped. Tell them why.

By all means, share this op-ed and talk it up with family and friends. Share your anger and dismay. Because until the general public knows what Medicare is stealthily trying to foist on them, these authorities won’t be moved to do anything other than continue down the wrong track.

Want to learn more? This article is the first time I heard of the MDC Program. Here is an excellent column in the The Washington Post. This video from The Hill is a barn-burner. And if these aren’t scary enough, steel yourself and read this.

The River is a nonpartisan news organization, and the opinions of columnists and editorial writers do not necessarily reflect the opinions of the newsroom.