I was about to fall asleep listening to opening statements today in the Senate debate on health reform–until Sen. John McCain of Arizona got to the podium. He began angry and got red-faced furious, coming back over and over to "$180 billion in cuts to Medicare Advantage," and how it would harm "my" seniors. He demanded that the whole bill be sent back to committee and all Medicare savings be eliminated.

I guess that means he wants most seniors, who are on traditional Medicare, to continue subsidizing the insurance companies and their overpaid executives who profit outlandishly from Medicare Advantage. The lies and the fear campaign that
insurers are using against any reform of Medicare Advantage, with folks
like McCain as their mouthpieces, are just disgraceful.

Medicare Advantage consists of the heavily marketed managed care plans that are paid on average more than 14% above the cost for regular Medicare enrollees, due to years of heavy lobbying by the for-profit insurers. The private plans offer free goodies like health club memberships to attract healthier customers, and pocket the overpayment as profit.

Seniors in regular Medicare pay ever-rising Part B physician care fees to pay that private bonus. Taxpayers pay more, too. It’s a scam, even though Medicare Advantage began as a way to save money through managed care.

McCain (in a file photo at left) talked as though pouring taxpayer money to for-profit insurance companies is the savior of Medicare. He practically spit as he said "How AARP can support this [Medicare advantage cut] is beyond my imagination … My seniors are outraged."

So the only seniors he regards as "his" are the ones who’ve been lured by glossy brochures? The ones whose profit-driven private insurers are dragging down the rest of Medicare? 

McCain’s rant was the misinformation and fear campaign in high gear. Cutting Medicare Advantage overpayments of more than $1,000 per patient per year would only trim the program back to what private insurers once promised it would be.

The predecessor of Medicare Advantage was designed in the 1980s to save Medicare money by utilizing a classic HMO model. Extra benefits (like the current health club benefits) were added only if the plan really saved money. Insurers promised Congress that they’d be far more efficient than regular Medicare, providing better care for less money. If only.

The plans did save money, more or less, for a few years. But relentless lobbying by the private plans chipped away at the promise of savings. Insurers also killed pilot plans to subject the private plans to competitive bidding, though early bids showed savings of over 20%.

Finally, the misnamed Medicare Modernization Act of 2003 sneaked in the provisions that now greatly overpay the Medicare Advantage plans.

As they have from the beginning, the Medicare Advantage plans use bonus benefits like health club memberships to attract the healthiest customers. Then, when the members face a life-threatening illness, they find out how limited their really big choices are. They suffer random and sometimes life-threatening benefit denials and delays, like anyone with private HMO insurance.

Is this what John McCain wants to "save?" Or does he just want to save the bloated salaries and profits of the insurance companies that so expertly game the Medicare Advantage system?