This commentary is by Marvin Malek, MD, MPH of Berlin. He is an internist and an active member of the Vermont Medical Society and Vermont Physicians for a National Health Program.On Sept. 26, 2024 — just three years after its launch and only three weeks before this year’s Medicare open enrollment period began — MVP Health Care and the University of Vermont Health Network announced that the Medicare Advantage plan they co-created — the UVM Health Advantage Plan — will no longer be offered to Vermonters after Dec. 31. The public will never know the cost of the hundreds of hours of personnel time both at the UVM Health Network and MVP that went into launching the insurance plan, or how much money may have been lost in the venture.Why did the UVM Health Network decide on this foray into the insurance sector?The Centers for Medicare and Medicaid Services has been lavishly overpaying Medicare Advantage plans since the founding of the program in 2007. Many Americans assume that private sector services are invariably more efficient than those delivered in the public sector, but in the case of Medicare, the opposite is true: Taxpayers lose hundreds of dollars every time a Medicare beneficiary chooses to let a Medicare Advantage plan manage their care due to these overpayments.These overpayments have many parts. CMS pre-pays plans based on severity of illness and a set of quality scores. In both areas pretty much every Medicare Advantage plan has learned how to game these measures. But they don’t lose money for performing poorly. There are no quality or severity bonuses in original Medicare even when patients are receiving superb care. These overpayments are steadily depleting the Medicare Trust Fund, totaling about $100 billion annually — more than 10% of Medicare’s entire budget.By 2021, the overpayments to Medicare Advantage plans led to profitability levels for insurers that were over 2.5 times higher per patient than for privately insured patients or Medicaid managed care. So over time, just about every corporate entity that had sufficient capital and relevant expertise started up a Medicare Advantage plan. And virtually all were profitable.READ MORE 2 Medicare Advantage plans will no longer be available in Vermont in 2025 by Peter D'Auria October 3, 2024, 6:17 pmOctober 17, 2024, 12:54 pm Then, on Jan. 30, 2023, after overpaying MA plans for the first two years of his term in office, the Biden CMS team released a remarkable memo: it noted that dating back to 2007, CMS had been overpaying MA plans. And the Biden team intended to put an end to the overpayments. CMS even went further, announcing it would retrieve overpayments from the prior five years.This prompted one of the most intense lobbying campaigns yet seen in Washington. These lobbyists translated the new policy to the public with dramatic distortions, such as “Biden is cutting your Medicare.” Biden’s CMS team backed off and ended up cutting out only 50% or so of the overpayments.But running an MA plan was no longer easy money. Many insurers — especially small insurers like MVP/UVM — simply abandoned the MA market. On the other hand, United Healthcare and other national corporate conglomerates will emerge less scarred by CMS’s crackdown on overpayments. Their massive financial reserves are garnering hefty investment returns in the current bull market. And they will likely benefit next year by adding beneficiaries whose insurers exited the MA market. To compensate for the reduced payments MA plans will undoubtedly double down on their tried and true strategies to maintain profitability.They can cut back on “enhanced benefits” (dental, vision, etc).  Increase copays when their enrollees access medical care. These can add up to $12,000 or more annually. Cut back on their network of doctors and facilities: Patients usually have to pay most or all of the fees when they seek care from providers who are out of network (e.g. care at a cancer specialty hospital). Further increase the rate of payment denials. They can deny payment for hospital care that’s already been provided even more frequently, refuse to cover inpatient rehab care that physical therapists deem to be essential, and require and then deny even more prior authorizations. and require and then deny even more treatment plans than the 2 million care plans they denied in 2021 through the prior authorization process. By contrast, it is difficult for the UVM/MVP MA plan to deny payments for procedures their own doctors are ordering, an additional disadvantage in competing with the likes of United Healthcare.Every one of these strategies either adds cost or reduces access to care for Medicare Advantage patients.The growth of MA enrollment has rested on its relatively low premiums to enroll. Coverage in original Medicare entails such high deductibles and copays that enrollees will want to have a supplemental policy to fill in those gaps. For those who don’t have Medicaid or retiree coverage, these policies cost over $2,000 annually. They provide nearly 100% coverage, without copays, narrow provider networks or denials of payment for care your doctor has ordered. Not having a really good health care option is something Americans have come to expect. It doesn’t have to be this way. Most developed countries provide comprehensive health services with minimal or no copays as a right of citizenship. Medicare should do the same, cutting its deductibles and copays, and implementing an annual cap on out-of-pocket payments. And then extend coverage to every single American. But until that happens, Medicare beneficiaries can avoid the serious risks of relegating control over your health care to profit driven MA plans, and instead sign up for original Medicare with a Medicare supplement policy.Read the story on VTDigger here: Dr. Marvin Malek: The rise and fall of the UVM Health Advantage Plan.