Traditional Medicare is at serious risk. The Center for Medicare and Medicaid Services (CMS) is conducting a little known and understood trial program implemented by the Trump administration and renamed REACH under the Biden administration. This program plans to privatize Medicare by 2030. All of this is happening largely outside of public view, without seniors’ consent, and without any oversight from Congress.
The stated goal of the REACH program is to reduce costs and increase the quality of Medicare. However, the key concern about these privatization efforts is that REACH allows private entities – unnecessary third-party middlemen – to siphon off significantly more money from limited Medicare dollars that should be spent directly on seniors’ health care rather than being redirected to private profits. REACH organizations can have a variety of for-profit organizations as partners, from private insurers to publicly traded companies, even venture capitalists, all who have an incentive to put profits first.
The Medicare program covers 44 million seniors – 15% of the U.S. population. Since 2008, private programs like Medicare Advantage (MA), currently cost Medicare an astonishing $143 billion more than traditional Medicare and are now driving health insurers’ record profits and costing taxpayers more money. While MA plans are required to spend at least 85% of premiums on health services, REACH partners have no such limit and are able to take a higher portion of any excess they don’t spend on health care services. Although administrative costs for traditional Medicare are about 4%, the REACH program allows up to 35% of Medicare premiums to be taken as profits.
REACH also fundamentally changes the relationship established under traditional Medicare where seniors can see any provider who takes Medicare and no prior authorization of care is required. Under REACH, when primary care providers (PCPs) agree to become a part of the program, seniors in those PCPs’ practices who are covered by traditional Medicare are automatically enrolled in the REACH program without the seniors’ consent. Medicare then pays the REACH organization, and REACH pays the providers their contracted rate and then assumes decision-making authority on the seniors’ care. Essentially, the REACH program adds unnecessary third-party interference in the doctor-patient relationship with a financial incentive to restrict care to seniors in order to maximize profits for these third-party private entities.
REACH is wrong for seniors who have contributed to Medicare so their health care will be covered. No entity should profit by siphoning off your or your loved one’s hard-earned Medicare funds.
If you agree the REACH experiment must be ended, we urge you to write or call your congressional delegation and President Biden and demand that they discontinue this trial program as it will do nothing to improve the health of seniors or reduce the cost of Medicare.
