Earlier this year, a Wall Street Journalarticle described how insurance companies appear to be gaming the Medicare system to get more money from the federal government. Insurers allegedly shuffle customers between Medicare plans in a way that increases the bonus payments they receive from Medicare.
The Medicare bonus system in question was created by the 2010 Affordable Care Act and went into effect in 2012.
Each contract between an insurer and Medicare is assigned a star rating. The ratings are supposed to reflect things like the quality of customer service, and whether members get the proper screenings and vaccines. Plans that win four or more stars win bonus payments for insurers.
The star ratings are meant to help consumers shop for plans. The bonus payments are meant to give insurance companies extra incentive to upgrade the quality of their offerings.
What seems to be happening is…
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