2025 -- S 0056

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LC000329

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

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S E N A T E   R E S O L U T I O N

RESPECTFULLY URGING THE UNITED STATES CONGRESS TO PROTECT PATIENTS

AND TRADITIONAL MEDICARE FROM MEDICARE ADVANTAGE

     Introduced By: Senators Ujifusa, Lawson, Valverde, Euer, Pearson, Ciccone, Murray,
DiMario, and Lauria

     Date Introduced: January 23, 2025

     Referred To: Senate Health & Human Services

     WHEREAS, In 1965, the federal Social Security Amendments Act was passed,

establishing healthcare insurance programs for those over age 65 (Medicare) and those with

limited incomes (Medicaid); and

     WHEREAS, Original Medicare coverage had gaps and un-capped co-insurance costs, but

instead of simply and directly improving original Medicare, private corporations were invited to

sell various supplemental and replacement plans for enrollee payments and guaranteed federal

subsidies; and

     WHEREAS, Medicare today consists of a piecemeal program of federal and private

programs, namely: Part A (inpatient/hospital coverage), Part B (outpatient/medical coverage),

"Medigap" coverage (co-pays/deductibles), Part C (Medicare Advantage plans), and Part D

(prescription drug plans), and generally, enrollees can either choose Traditional Medicare (TM),

with federally run Parts A and B, and privately run Medigap and Part D plans, or choose

Medicare Advantage (MA) Part C private plans to completely replace TM; and

     WHEREAS, Insurance companies selling MA plans aggressively market to Medicare

eligible people without full disclosure of TM costs and benefits compared to MA; and

     WHEREAS, In 2024, fifty-four percent of all eligible beneficiaries in Medicare are

enrolled in private MA insurance plans which cover mainly those over age 65, as well as others

with certain medical conditions; and

     WHEREAS, States may only regulate MA plans in very limited ways because of federal

preemption and generally cannot regulate how MA plans market to potential enrollees; and

     WHEREAS, The data show that privatized Medicare has not once yielded savings for the

program; conservative estimates by the Medicare Payment Advisory Commission (MedPAC), an

independent agency created to advise Congress on the Medicare program, show that payments to

MA plans over the past two decades have always been higher than they would have been for

patients in TM; and

     WHEREAS, MA plans may offer low or no monthly premiums and cap out-of-pocket

expenses, but MA plans have been found to cost enrollees more than TM when enrollees become

seriously ill, such as when they get cancer or have extended hospital stays; and

     WHEREAS, Although MA plans attract enrollees with extra benefits, like coverage for

dental, vision, or hearing, enrollees who use these benefits often end up paying for most of these

costs out-of-pocket; and

     WHEREAS, Despite higher payments, MA plans generally spend less per patient and

provide worse coverage than TM; and

     WHEREAS, Unlike TM, which gives enrollees freedom to go to virtually any doctor or

hospital in the country, MA provider networks are significantly narrower and geographically

limited; and

     WHEREAS, Unlike TM, which covers physician's orders without requiring third-party

approval, MA plans require prior authorizations and have been found to improperly deny about

13 percent of prior authorization requests; and

     WHEREAS, Beginning in 1965, original Medicare became the primary driver for greater

healthcare equality because the government required hospitals to desegregate before receiving

any Medicare funds; and

     WHEREAS, Today, MA has exacerbated healthcare inequality by enrolling

disproportionately high numbers of disadvantaged populations (e.g., racial minorities, disabled

individuals, lower income individuals) into plans that often offer worse coverage and care than

TM; and

     WHEREAS, Retirees are forced into MA plans because about 53 percent of large

employers (200+ employees) require their retirees to accept a MA plan or lose their retirement

health benefits; and

     WHEREAS, Barriers to switching to Traditional Medicare, including lack of "guaranteed

issue" protections, waits for "open enrollment," insurers denying or charging steep prices for

Medigap Part D drug plans, etc., keep MA enrollees trapped in MA plans; and

     WHEREAS, Medicare Advantage plans have achieved higher revenues by taking actions

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that do not benefit enrollees, including:

     (1) Gaming risk pools by marketing to younger, healthier enrollees ("cherry-picking")

and incentivizing older, sicker beneficiaries to leave ("lemon-dropping");

     (2) "Upcoding" to make patients seem sicker than they really are to increase

reimbursements from the federal government;

     (3) Using "utilization management" tools such as prior authorizations, step therapy

protocols and artificial intelligence (AI) algorithms to delay or prevent medically necessary care;

     (4) Delaying or refusing payments to hospitals so that they are increasingly not accepting

Medicare Advantage patients; and

     (5) Gaming contract construction to maximize quality payments under the star rating

system; and

     WHEREAS, Most MA plans are sold by large insurers that have multiple related

businesses, such as pharmacy benefit managers, and those related businesses can account for

about 20 percent to 70 percent of spending, parent companies can circumvent Medicare limits on

profits; and

     WHEREAS, Dozens of fraud lawsuits, inspector general audits and investigations by

watchdog groups have shown that major health insurers have exploited the program to inflate

their profits by billions of dollars; and

     WHEREAS, Insurers typically earn twice as much gross profit from their MA plans than

from other types of insurance and private MA insurers have more than doubled their profit

margins per enrollee; and

     WHEREAS, Estimated amounts overpaid to MA (between $83 billion and $127 billion in

2024) are more than the amounts needed to totally eliminate Medicare Part B premiums, or fund

the entire Medicare Part D prescription drug program, or establish dental, hearing, and vision

coverage for Medicare and Medicaid enrollees; and

     WHEREAS, There is a growing bi-partisan effort by federal legislators and the Centers

for Medicare and Medicaid Services (CMS) to protect patients from the kind of MA problems

noted above; now, therefore be it

     RESOLVED, That this Senate of the State of Rhode Island hereby recognizes the need

for the United States government to prioritize patients over corporate profits and protect and

expand traditional Medicare and hereby respectfully urges Senator Jack Reed, Senator Sheldon

Whitehouse, Congressman Seth Magaziner, and Congressman Gabe Amo to support and pass

legislation, and ask the U.S. Department of Health and Human Services Secretary and Centers for

Medicare and the Medicaid Services Administrator to take immediate administrative actions,

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including to:

     (1) Require MA plans to retain and provide information, contracts, documents, and

financial data that allows transparency for and accountability to taxpayers and enrollees;

     (2) Conduct more MA plan audits to identify overpayments and fraud;

     (3) Strictly regulate MA marketing to require full disclosure to potential enrollees of

risks, disadvantages, and possible future costs;

     (4) Reduce incentives or requirements for historically disadvantaged groups to accept an

inferior MA plan over TM;

     (5) Prohibit MA plans from taking actions that increase their profits without increasing

healthcare services, including upcoding, risk pool "cherry-picking" and "lemon-dropping", and

using utilization management that improperly denies or delays medically necessary care and

timely payments to providers;

     (6) Prohibit MA plans from limiting coverage for beneficiaries seeking expert specialty

care by imposing overly narrow provider networks;

     (7) Require employers that offer retirement benefits to give employees the option to

enroll in TM;

     (8) Work with the Justice Department to prosecute and recover improper payments; and

     (9) Redirect funds that currently go towards enriching MA plans to instead go towards

protecting and expanding traditional Medicare; and be it further

     RESOLVED, That the Secretary of State be and hereby is authorized and directed to

transmit duly certified copies of this resolution to the Clerk of the United States House of

Representatives, the Clerk of the United States Senate, and to members of the Rhode Island

Delegation to the United States Congress.

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