Managing to Profit Howard Rohleder | Oct 25, 2021, 2:26 am ET
THE GAMBLING TRUISM says you can’t beat the house. That brings me to a recent HumbleDollar article that discussed choosing either a Medicare Advantage plan or traditional Medicare with an accompanying Medigap policy. Almost two dozen readers weighed in with comments.
My two cents: Never forget that the managed-care companies offering Advantage plans are mostly for-profit companies that are publicly traded. The government’s purpose is to transfer its insurance risk to those companies. These managed-care companies must then manage that risk through rationing, limiting choice and negotiating provider payments, as well as encouraging healthy behavior among their customers.
To the extent they’re allowed, they deny coverage or charge higher rates to those with preexisting conditions. Although Medicare Advantage was first offered in the late 1990s, enrollment really took off about 10 years ago. That was when Congress made the program more palatable to insurance companies. Advantage plans became their growth driver and industry marketing got more aggressive. Enrollment has doubled over the past decade.
Read more at the link below