Under the headline “Insurers game Medicare system to boost federal bonus payments,” The Wall Street Journal reported on March 11 a practice called “cross-walking,” where insurance companies routinely shift millions of seniors in lower-rated Medicare Advantage plans to higher-rated plans so that the insurance companies might benefit from subsidies that the federal governments pays to higher-rated plans.
Sounds good, but the seniors are led to believe they will get higher value. In fact, they pay more and gain nothing in care — while insurance companies get more of our tax money to augment already record-breaking profits.
Apparently all the major insurance players participate in this “cross-walking” charade. The Wall Street Journal gave particular attention to Humana. When Humana got caught “cross-walking” seniors from Medicare plans that pay Humana less to those that give seniors less and pay Humana more, share prices plunged 5 percent — $1.4 billion drop in market capitalization.
But share prices recovered completely upon news of increased enrollment in more profitable plans — that is, “cross-walking” 1.27 million seniors.
Staggering numbers from the actuarial cons gaming the system.
Read the full letter here.