GAO Report on Medicare Advantage Waste is Released
A Government Accountability Office (GAO) report released Wednesday by House Ways and Means Health Subcommittee Chairman Pete Stark (D-CA) found that the private insurance companies administering these plans have spent less than projected on beneficiaries, while raking in an extra $1.4 billion on top of their $35 billion in profits.  The GAO examined plans representing 78% of MA enrollees, and found the programs only spent 85.7% of their total revenue on medical expenses in 2005, significantly below their projection of 90.2%.  “Private plans in Medicare spend even less on medical care than they report - to the tune of over a billion dollars in one year alone,” said Stark.  “These funds go directly into the pockets of big insurance companies, not toward medical care for beneficiaries.”  Added Ruben Burks, Secretary Treasurer of the Alliance, “This report provides hard evidence of what we have said all along – these plans cost more to deliver less than traditional Medicare.”

Some Pension Funds Drained in Order to Fund Executives' Benefits
An examination by The Wall Street Journal finds that a range of companies have been quietly converting their pension plans into resources to finance their executives' retirement benefits and pay.  By moving some of the obligations for supplemental pensions into rank-and-file pension plans, companies capture tax breaks intended for pensions of regular workers and use them to pay for executives' supplemental benefits and compensation.  Companies using this tactic have included Intel Corp. and CenturyTel Inc.  In addition to being a dubious use of tax law, the practice risks harming regular workers: It can drain assets from pension plans and make them more likely to fail.  Ultimately, taxpayers are helping finance executive compensations while companies grow richer.  With the current bear market in stocks weakening many pension plans, the maneuver could put more plans in jeopardy. 

This information provided by the Alliance for Retired Americans

www.retiredamericans.org

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