Real Numbers

Real Numbers

        A quick follow up on my blog page entry of yesterday regarding the fallacy that a single payer (let’s call it Medicare for all, since that already exists for over 65s) would make hospitals and other facilities fail, since Medicare "only pays 90% of the actual charges.”  This quote, in similar form, has come from various sources all with the commonality that they oppose a single payer system and will shamelessly skew and, in many cases invent “data” to prove it. It also implies that Hospitals couldn't "get by" if the had to subsist on "90% of billed charges." I thought I had wrapped up all I need to say on this topic yesterday, but then I received a letter from Tricare in the afternoon mail.      

         Understand (for you civilians) that one of the benefits of being a retired military careerist is that for the retiree and his or her spouse, at age 65 a program called “Tricare for life” becomes a secondary insurer. No, this isn’t “free medical insurance.” Like all Americans at age 65, Medicare becomes the primary insurer, and either Medicare or some form of “Medicare Advantage” plan is the initial payee. Tricare simply covers what might be a co-pay for non-retirees, like a Medicare supplement. It is a beautiful thing, true, but all military retirees are still required to pay Medicare part B, exactly like civilian retirees. Tricare sends us a notice every time either Emily or I have a medical bill which is covered by Medicare. It is simply a notice that Medicare paid (whatever) and they (Tricare) paid the rest.

        Yeah, so what? So, lets return to the fallacious statement that “Medicare only pays 90% of the set fee while other insurance pays the full price.” 

        Yesterday’s notice (not a “bill” since I paid nothing) was for “one eye” of my wife’s cataract surgery (a resounding success!). Now here’s the interesting part.

“Amount billed: $1,500”

Understand this, if nothing else. The only time, if ever, that the facility receives the “billed” amount would be if someone with no insurance and lots of money elected to have this procedure in the facility. A wild guess at how often this occurs for this and other elective procedures would be in the vicinity of “never.”  

“Other insurance paid: $713”

This “other” insurance isn’t Medicare, but United Healthcare, a private Medicare advantage plan. The reasons why we don’t use just Medicare are not germane to the discussion. The “take-away” here is that if Medicare had paid the “90%” which the erroneous claim alludes to, then the provider would have received $1350! In other words, the private payer only paid 47% of the billed fee.

“Tricare allowed: $895” (this is the same as what Medicare “allows”

“Tricare paid $181.92”

Cost share/copay: 0

Read that again. Counter to claims that Medicare is shortchanging providers at 90%, United Healthcare has negotiated a far lower cost share. This is so low that Tricare chipped in an additional $182, bringing the actual percentage of the billed fee actually paid to only 60% of the nominal fee. There was no “cost share” for us. Apparently the excellent Ocala Eye organization, the provider in this instance, can survive on 60%  of "billed" charges!   

So, tell me again how private insurers are “paying more than Medicare?”