Curbing Medicare Advantage Overpayments Could Benefit Millions of Low-Income and Minority Americans

Source: January Angeles and Edwin Park, Center on Budget and Policy Priorities, February 19, 2009

More than 25 million Americans belonging to minority groups lack health coverage; minorities constitute 34 percent of the nation’s population but nearly 55 percent of the uninsured. Enactment of comprehensive health reform that achieves universal coverage would therefore disproportionately benefit minorities.
Key Findings:

* Minorities would benefit disproportionately from a system of universal health coverage; they constitute 34 percent of the population but nearly 55 percent of the uninsured. Some 14.8 million Hispanics, 7.0 million African Americans, and 3.4 million Asian Americans and other people of color are uninsured.
* One way to help finance universal coverage would be to eliminate the large overpayments to the private insurers that serve some Medicare beneficiaries through the Medicare Advantage program. These overpayments will cost $157 billion over the coming decade, weakening Medicare’s finances and raising costs for beneficiaries in traditional Medicare.
* To defend these overpayments, insurers claim that low-income and minority beneficiaries rely disproportionately on them for supplemental coverage. In fact, such beneficiaries are more likely to get this coverage through Medicaid.
* Furthermore, only a small share of the Medicare Advantage overpayments actually go toward helping low-income and minority beneficiaries afford health care.

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