An Advantage to the Provider of the UC Advantage?

A few years back, UC introduced a Medicare Advantage plan for retirees and emeriti. Medicare Advantage plans involve reassigning one's Medicare account from federal Medicare to a private carrier. Medicare then pays a risk-adjusted premium to the carrier which handles the administration of the benefits. The benefits are supposed to be equivalent to traditional Medicare, but privately administered. Private carriers have been actively seeking Medicare Advantage customers. Well over 40% of those folks eligible for Medicare now in fact have Medicare Advantage plans.*

Originally, UCOP appeared to want to replace its retiree/emeriti health plans with a Medicare Advantage alternative to save money. Eventually, after protests, it made Medicare Advantage - offered by United Healthcare - one option among the plans offered. However, it was the cheapest plan, even cheaper than Kaiser. This feature made it attractive to those eligible. It also cut the Regents' contribution to retiree/emeriti health because their payment is based on the lowest cost option.

There have been concerns that Medicare is overpaying Medicare Advantage carriers and that at some point Congress will step in and the costs to customers will go up. Whether Congress, given its current dysfunction, will take action anytime soon is unclear at best. 

In the meantime, yours truly noticed the ad shown above that appeared in yesterday's LA Times. It appears, based on the ad, that what is being offered to UC's Medicare-eligible population is now to be offered to the general public, at least in the Los Angeles area. Whether United Healthcare's ability to offer its advertised plan was partly a product of its earlier arrangement with UCOP is unknown. But it may be that offering Medicare Advantage to UC's eligible retirees/emeriti had spillover benefits to the carrier.

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*Advocates of single-payer health insurance - by which they mean a government-run insurance organization - sometimes refer to the idea as "Medicare for All." They don't seem to realize that Medicare is in fact being rapidly privatized. But that is another story. See:

https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2021-enrollment-update-and-key-trends/.