Will Parry might get an extra service or two from the private Medicare plan that covers him at Group Health. But the fact that it’s a private plan – an insurance company runs it, not the federal government – is worrying him to death.

The bigger the private plans get, Parry says, the more insurance companies will suck federal tax dollars away from traditional Medicare, until America’s healthcare program for retirees goes bust.

It’s all part of a plan, he says, to privatize Medicare through the back door – a door that activists such as Parry, president of the Puget Sound Alliance of Retired Americans, are trying to slam shut as fast as they can in the new Democrat-controlled Congress.

On July 10, Parry and state Insurance Commissioner Mike Kreidler participated in a press conference held by the Washington Citizens Action Network (WCAN), which released a report detailing how many complaints private Medicare plans are generating to state insurance authorities and how much more they cost taxpayers than the old system of the government paying doctors.

Across the nation, private Medicare plans cost an average of 12 percent more than traditional Medicare coverage. But in Washington State, according to a WCAN report, insurance companies get an average of 21.5 percent more in government-paid premiums – an extra $1,500 a year for each user of a private Medicare Advantage plan in the state.

With about 18 percent of the state’s 851,000 Medicare recipients now signed up for a private plan, WCAN estimates that the federal government will make a total of $233 million in overpayments to private insurers this year just for residents of Washington State.

Nationwide, about one in five Medicare beneficiaries have a Medicare Advantage plan, which the report estimates will cost taxpayers an extra $54 billion over the next five years – something U.S. Rep. Pete Stark (D.-Calif.) wants to stop. Next week, Stark, who chairs the health subcommittee of the House Ways and Means Committee, plans to introduce legislation that would shift most of the $54 billion subsidy to children’s health coverage.

The private insurance windfall started in 2003, Parry says, when the then-Republican Congress passed the Medicare Modernization Act. While Congress allowed insurers to start selling their own Medicare plans in 1997, the new law let them enter the Medicare market.

The act’s much-publicized Part D drug coverage plans have caused many seniors headaches, Parry says. But few people know Part C of the act allows private companies to collect government money for their full-coverage Medicare plans — which Parry insists aren’t offered to everyone. The insurance companies, he says, are cherry-picking only the youngest, healthiest senior citizens.

Over time, he says, that will leave only the oldest, sickest and highest-cost retirees on the regular Medicare rolls. With the Bush Administration continually pressing for more operating cuts to the program, costs are eventually going to hit a point, Parry says, at which insurance lobbyists will push Congress for full privatization.

“We’re convinced it’s a deliberate scheme on the part of the insurance industry to destroy Medicare,” he says.

“If there is a need for additional benefits, our organization would be the first to advocate it,” says Joshua Welter of WCAN. “But that should be done through traditional Medicare, through a program that works, and not through a huge giveaway to private insurers.”

Some of the Medicare Advantage plans offer a few more bells and whistles, Welter says, but that doesn’t mean the medical coverage is any better. The report also notes that salespeople often strong-arm or trick seniors into switching from traditional Medicare, only to discover later that their particular doctor or needed medications aren’t covered.

The report cites a survey of 41 state insurance commissioners in which 39 of them said they had received complaints about abusive Medicare Advantage sales practices. Washington state’s insurance commissioner is one of them. Since 2003, Kreidler says, he’s received more than 300 consumer complaints about private drug and full-coverage plans.

Among the complaints, Kreidler’s office says agents have pressured seniors with the line that Medicare won’t be around or even presented themselves as government officials – none of which a state insurance commissioner can do anything about today. In 1997, Congress stripped state insurance commissioners of the right to regulate the plans – something Kreidler is calling on Congress to reverse.

In the meantime, Medicare Advantage is helping drive up the cost of all retirees’ monthly premiums, according to Steve Kofahl, a Social Security Administration worker and president of Local 3937 of the American Federation of Government Employees. Last year, Kofahl says, the monthly premium for traditional Medicare was $88.50. Now it’s $93.50.

“Eventually we believe it will reach a tipping point where traditional Medicare is no longer a viable option,” Kofahl says. “Ultimately, everyone will have no choice but to move into Medicare Advantage.”