Are insurers more interested in profits or saving money for taxpayers?

Are insurers more interested in profits or saving money for taxpayers?
WASHINGTON (AP) -- Soon to be in charge of Congress, Democrats are looking to chip away at billions of dollars in payments to the health insurance companies that run Medicare's managed-care programs.
The cuts could range up to about 27.6 billion over five years, an amount the industry says would reduce the number of managed-care plans serving seniors and the disabled.
Under traditional Medicare, health care providers bill the government for the services they perform. But with "Medicare Advantage" managed care, the insurers get a set amount per person. Then, the insurers reimburse the people who provide the care.
Many health care experts believe that managed care leads to a greater focus on prevention and better coordination of services. And this focus, with an emphasis on providing only the care that's necessary, saves money for taxpayers and patients.
But Democrats suggest the insurers are more interested in making a profit than in saving taxpayers money. The incentive to keep costs low also gives insurers an incentive to scrimp on care, the Democrats say.
For years, Democrats have said the Republican-led Congress intentionally overpaid insurers so they could offer lower costs and more benefits are offered through traditional Medicare.
Evidence of overpayments
"We have strong evidence now that there are very, very large overpayments to insurance companies," said Rep. John Dingell, D-Mich., who will probably serve as chairman of the House Energy and Commerce Committee.
Dr. Mark McClellan, who oversaw the Medicare program until just last month, said the payments to insurers make the program more affordable to beneficiaries. Their premiums would go up if the government subsidies went down, he said.
He also said that the plans offer patients the promise of more effective care than they get through traditional Medicare. For example, many diabetics in managed care undergo aggressive counseling and testing of their blood-sugar levels to help them avoid costly complications down the road, such as kidney disease or stroke. They often don't get that kind of coordinated care in the fee-for-service setting, he said.
"It would be a real shame for beneficiaries in Medicare not to have access to that," McClellan said.
Currently, the government pays about 11 percent more for a patient in managed care than when a comparable patient is in traditional Medicare, says an independent advisory panel established by Congress.
The higher reimbursement rate for managed care shows that insurers are profiting at the taxpayers expense, Democrats say.
"Much like Iraqi weapons of mass destruction, the purported Medicare Advantage cost reductions don't exist," Rep. Pete Stark of California said in the summer. Stark oversees health care issues for Democrats on the House Ways and Means Committee.
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