The Medicare Advantage Scam

Philip Rucker takes a good, hard look at the scam that is Medicare Advantage. Essentially, it works like this: Congress allowed private HMOs to compete for Medicare patients under the rationale that they could offer better service at lower cost than the government. They couldn't. So Republicans in Congress began boosting their payments, to the point that Medicare Advantage gets paid 114 percent what Medicare gets paid to care for a patient. That leads to some fun perks, like free gym memberships and complimentary aspirin and band-aids, which in turn leads seniors to defend the program because they like their perks. But it also means a lot of unnecessary expense for taxpayers.

And it's important to remember that those free perks do not account for the whole of Medicare Advantage's overpayments. Rather, economists have estimated that for every extra dollar we pay the program, 14 percent is passed on to seniors and 86 percent goes to profits or other costs. In other words, we're getting only 14 cents of obvious value for every dollar of overpayment.

But no matter. Rucker notes a bunch of Senators -- both Republican and Democrat -- are solidly committed to the principle that we can never cut a dollar of Medicare spending, no matter how wasteful or unnecessary it is. It's "not fair to take these benefits away from seniors," says Sen. Jon Kyl, who appears to think it's fair to ask taxpayers to overpay insurance companies so long as insurance companies give 14 cents on every dollar to seniors.

Sometimes, it almost seems as if this country deserves to go bankrupt.