Northwest Senior News January 2021

Fat Heals—Sugar Kills: Chapter 4 – Part 1, Sugar Isn’t Always Sweet

We continue our review and digest this month of Fat Heals-Sugar Kills: The Cause of and Cure for Cardiovascular Disease, Diabetes, Obesity, and Other Metabolic Disorders by Dr. Bruce Fife. In the first part of Chapter 4 titled Sugar Isn’t Always Sweet, Dr. Fife stresses the point that sugar is sugar whether is be table sugar, fructose, agave, honey or any other of the myriad forms of sugar.


Fat Heals—Sugar Kills: Chapter 4 – Part 2

Part 2: The key takeaway here is that the over consumption of sugar leads to excessively elevated blood sugar (glucose) levels. This, in turn, forces the pancreas to produce more insulin to deal with the high sugar load, and this leads to our body’s cells becoming resistant to the effects of insulin. This situation is known as insulin resistance, which is the pre-cursor to type 2 diabetes.


Sugar Blues: Chapter 1

Seven years ago, we initiated our review and digest of William Dufty’s book, Sugar Blues. His account of his sugar addition is timeless as the problem of sugar addiction continues unabated. We have revised our original summary and digest of his Chapter 1 titled: It Is Necessary to be Personal.

 


Gary Taubes, a well-known scientific journalist and author, published on YouTube a speech of his titled: The Case Against Sugar. We have republished our original transcription of the first segment of his speech with updated comments. His talk is just as appropriate today as it was a few years ago.

 


Sugar Blues Chapter 2—The Mark of Cane

by William Dufty: 

Dufty takes us back to the beginning of time, Paradise Lost and the Garden of Eden.  He references Biblical references to people living a very long time.  He discusses ancient Chinese acupuncture meridians, which are called beauty marks in the West, dark spots that appear at the time of birth or later.

When these charts are compiled thousands of year ago, “natural death” was going to sleep without waking up—was the normal way to die….refined sugar [sucrose] did not form a part of the human diet.

He relays to us the diet of these early people which consisted of a variety of nuts including almonds, chestnuts, walnuts, and pistachios.  For fruits and vegetables they had apples, fig, grapes, mulberries, olives, melons, carob, mint, onion, anise, cucumbers, lentils, and mustard.  For grains they had barley, millet, rye, and wheat.  They had milk and honey and a multitude of natural goodies.  Most all of these had natural sugars.

Dufty explains that none of the ancient books, the Bible, the Code of Mann, the I Ching, the Yellow Emperors Classic of Internal Medicine, the New Testament and the Koran, make any reference to sugar.  He references “sweet cane” that may have come from India and Polynesian myths and legends that made much of this sweet cane.  It was native to tropical climes, and efforts to cultivate it elsewhere failed.

The sweet cane “was cultivated with great labor by husbandman who bruise it when ripe in mortars, set the juice in a vessel until concreted in form like snow or white salt.”

The Greeks described it as a “kind of honey” growing in canes of reeds.  Early Roman and Greek accounts compared it to basic staples of the time, “Indian salt” or “honey without bees; and they imported it at an enormous cost.  The Persians were credited with the research and development of a process for refining the juice of the cane into a solid form that would last without fermenting.  It was feasible to transport the product.  He sets the time around 600 A.D.  Dufty continues with this interesting quote:

The Persian empire rose and fell, as empires always do.  When the armies of Islam overran them, one of the trophies of victory was the secret for processing sweet cane into medicine.

Dufty recounts the victories of the Arab armies and the spread of the Arab empire.  He continues:

It is tempting to wonder from eyewitness reports that turn up later, what role sugar played in the decline of the Arab empire.  Sugar is not mentioned [in the Koran], but the heirs of the Prophet [Mohammad] are probably the first conquerors in history to have produced enough sugar to furnish both troops and courts with candy and sugared drinks.  An early European observer credits the widespread use of sugar by desert fighters as their reason for their loss of cutting edge.

 The author quotes Leonhard Rauwolf, a German botanist:

The Turks and Moors cut off one piece [of sugar] after another and so chew and eat them openly everywhere in the street without shame…in this way [they] accustom themselves to gluttony and are no longer the intrepid fighters they had formerly been.

Dufty comments, “This may be the first recorded warning from the scientific community on the subject of sugar abuse and its observed consequences.”  He draws a parallel with the Christian Crusaders.  They, too, acquired a taste for the “sauce of the Saracens”.  He quotes Pope Clement V advocating that the Christians, too, get in the sugar business.

…If the Christians could seize those lands [the Sultans] great injury would be inflicted on the Sultan and at the same time Christendom would be wholly supplied from Cyprus.  Sugar is also grown in the Morea, Malta, and Sicily, and it would grow in other Christian lands if cultivated there.  As regards Christendom, no harm would follow.

Dufty explains that Christians took a big bite of the “forbidden fruit”.  What followed was seven centuries in which the seven deadly sins flourished across the seven seas, leaving a trail of slavery, genocide, and organized crime.

My comments:  Yes, the forbidden fruit: I had a paper route, and in those days the paperboy collected for the monthly subscription. I had change jingling in my pocket, and there were little mom and pop markets all around me.  I could easily sneak a soda pop or a Snickers bar. It was easy to get hooked on the sweet stuff.

I recall my son’s morbidly obese Cub Scout leaders acting as drug pushers in tantalizing their charges with CAKE!! after the evening’s activities.  I remember fighting with my brother over splitting a leftover piece of cake, pie, or candy as to who got the biggest piece.  Funny thing, we never fought over who got how much of the leftover vegetables!  So yeah, it’s easy to understand how these people of hundreds of years ago went berserk over sugar.  I was no different.

Continuing: Dufty quotes the British historian, Noel Deerr: “It will be no exaggeration to put the tale and toll of the slave trade at 20 million Africans, of which two thirds are to be charges against sugar.”  He then spends the next couple of pages describing the growth of the Portuguese and Spanish slave trade and sugar cultivation.  Then the Dutch got into the act by 1500.

No other product has so profoundly influenced the political history of the Western world as has sugar. . .The Portuguese and Spanish empires rose swiftly in opulence and power.  As the Arabs before them had crumbled, so they too fell rapidly into a decline.  To what extent that decline was biological—occasioned by sugar bingeing at the royal level—we can only guess.  However, the British empire stood by waiting to pick up the pieces.

He tells us that Queen Elizabeth initially called the slave trade, “detestable”, but she soon capitulated.  The Queen sanctioned the Company of Royal Adventurers of England, which gave them a state monopoly of the West African slave trade.  In the West Indies the Spaniards had exterminated the natives and brought African slaves to tend their fields of cane.

Comment: What is a 20th century parallel to the 15th and 16th century European sugar craze?  I would think that one parallel is the oil rush.  Just like the machinations of the governments back then, I think of the 1953 U.S. CIA sponsored overthrow of the democratically elected Iranian Prime Minister Mohammad Mosaddegh.  He nationalized the Iranian oil industry, and the Western powers [Standard Oil and BP] didn’t like that.  Weren’t Gulf Wars I and II primarily about oil? Sugar then, oil now.

Continuing: The sugar trade in the West Indies grew in another way.  Fermented cane juice was turned into rum.  The first rum runner imported their precious tonic to New England where a “pennies worth” of rum was traded with the Indians for furs.  That latter were sold in Europe for a fortune.  On the return voyage back to the New World, the ships of the Queen’s Company of Royal Adventurers visited the West African coast to pick up more slaves, who in turn would tend the sugar cane fields to produce more sugar, molasses and rum.

It was rum for the American Indians, molasses for the American colonists, and sugar and furs for Europe.  It was quite a neat deal until the land in Barbados and other British islands was worn out and exhausted.

Britain’s Navigation Acts of 1660 required that the trade of all British colonies had to be with England, Ireland, and British possessions.  Mother England wanted to protect her revenues and maintain the priceless shipping monopoly.  Dufty explains that by the 1860’s sugar became a synonym for “money” in the English language.

He explains that the Molasses Act of 1733 did as much or more to precipitate the American War of Independence as did the Boston Tea Party.  The act levied a heavy tax on sugar or molasses coming from anywhere other than the British sugar islands in the Caribbean.  The ship owners of New England cut themselves in.  They delivered rum to West Africa in exchange for more slaves, who were then sold to the British plantation owners.  Then they shipped molasses back to the colonies which was to be distilled into rum.  Dufty explains that the per capita consumption of rum in the colonies was an annual four gallons per person.

Dufty quotes the French philosopher Claude Adrien Helvetius: “No cask of sugar arrives in Europe to which blood is not sticking.  In view of the misery of these slaves anyone with feelings should renounce these wares and refuse the enjoyment of what is only to be bought with tears and death of countless unhappy creatures.”

Helvetius was forced to recant [in part to save his skin], as the French were cutting themselves in on the sugar trade.  The Sorbonne [University of Paris] condemned him and his books were burned.  Nevertheless, the genie was out of the bottle.

The stigma of slavery was on sugar everywhere, but most particularly in Britain.  Everywhere sugar had become a source of public wealth and national importance.  Through taxes and tariffs on sugar, government had remained a partner in organized crime.  Fabulous fortunes were being amassed by plantation owners, planters, traders and shippers; and the sole concern of European royalty was how they would take their cut.

My comments:  Are things much different today?  President Nixon was paranoid about the 1972 election, and one of his concerns was rising food prices.  He teamed up with the then Secretary of Agriculture, Earl Butz, to start massive government subsidies for the growing of corn in an effort to keep food prices low.  Japanese scientists figured out in the early 1970’s how to make high fructose corn syrup [HFCS] from that cheap corn.  Therefore, we now have the price HFCS being kept artificially low through government subsidies and the price of imported sugar kept artificially higher because of tariffs.  Sound familiar?

Meanwhile, large multi-national corporations are making a fortune by selling, cheap, low quality, disease-facilitating food [if you can call it food] and beverages to the unsuspecting public all laced with HFCS.  And on the farm we now have herbicide-resistant genetically modified organisms [GMO’s] being doused with herbicides.  The lobbyists in the corn producing states push to keep the cash cow flowing. And the politicians are bribed [through campaign contributions] to continue to vote the status quo, and the tax-payers are pick-pocketed to finance the entire scheme.

Future generations have to be properly trained to keep the show rolling along.  Schools have gotten in on the act by allowing soda-pop vending machines on campus, although due to protests, some have since been removed.  At least one elementary school in Lewiston, ID has a Pepsi logo on its outdoor info sign.  Our local skateboard park is called “Mountain Dew Skateboard Park”. The objective is to burn the logos of these sugary drinks into the minds of new consumers.

The craze for sugar certainly continues.  What about the slaves?  We don’t have them anymore, or do we?  If we do, who are they?

Continuing: Dufty explains the British Empire was totally hooked on the issue of sugar.  Gluttony had produced necessity.  Sugar and slavery were indivisible.  Therefore, they were defended together.  When sugar was originally introduced in England, a pound cost an entire year’s salary for the average working man.  As the sugar trade increased, the price fell precipitously.  By 1700 the British Isles were accounting for 20 million pounds of sugar per year.  By 1800 it was 160 million pounds per year.  The consumption had gone up eight-fold.  A hundred years later the British were spending as much on sugar as they were on bread.  The consumption had increased to 73 pounds per person per year.

The French didn’t sit idly by.  By 1700 refined sugar was France’s most important export.  The British struck back with naval blockades, cutting off their source of sugar cane.  A German scientist, Franz Carl Achard, was experimenting with a “type of parsnip” from Italy, originally believed to be from Babylonia.  Under pressure from the blockade, French scientists found a way to process the beet into a new kind of sugar “loaf”.  Napoleon ordered beets to be planted everywhere in France.  [Sound familiar?]

After Napoleon had beaten Britain’s naval blockade, the Quakers in Britain took up the cultivation of sugar beets as an anti-slavery gesture.  The status quo producers of sugar from sugar cane saw that as a serious threat and demanded that the “Quakers be uprooted”.  Most of their beets were fed to cows, and it wasn’t until a shipping shortage spawned by WW-I that Britain resumed the growing of sugar beets. [

The French abolished the slave trade in 1807, and the British did so 26 years later.  The British indemnified slaveholders in Barbados and Jamaica $75 to $399 a head.  Before then, there were plenty of slave revolts threatening those that ran the plantations.  After the abolition of slavery, East Indian immigrants were imported to man what was left of the powerful sugar business.

Up until this time, refined sugar was a raw, light brown-like sugar.  New American inventions were about to change that forever.  James Watt perfected the steam engine, Figuier developed a method for making charcoal out of animal bones, and Howard produced the vacuum pan.  Now the Americans could produce white, crystalline sugar.  Cuba became the new, back door colony for the U.S.  Import duties of $0.02 per pound provided for 20% of federal revenues.

Americans soon outdistanced the British and virtually every other nation in sugar bingeing.  The U.S. had consumed one-fifth of the world’s production of sugar every year but one since the Civil War.  By 1893 America was consuming more sugar than the whole world had produced in 1865.  By 1920…that figure for sugar production had doubled….It is doubtful there has ever been more of a challenge to the human body in the entire history of man.

Dufty draws several parallels of opium trade and production of the “mark of cane”.  They both began as medicines and ended up being used for habit forming sensory pleasures.  The opium traffic, as with sugar, seems to have originated in Persia.  Fortunes were made in their trade.  Opium was refined into morphine which was injected into those with sugar-induced diabetes, as the hypodermic needle had been invented by then.  Taxes were collected from both of them.  Many Union soldiers came home that were completely addicted to morphine.  Morphine was further refined into heroin, and the latter was also used to treat sugar diabetes.

Dufty quotes Dr. Robert Boesler’s [a dentist] 1912 comments:

Modern manufacturing of sugar has brought about entirely new diseases.  The sugar of commerce is nothing else but concentrated crystalized acid. If, in former times sugar was so costly that only the wealthy could afford to use it, it was, from the national economic standpoint, of no consequence. Today…because of its low cost, sugar has caused a degeneration of the people….The loss of energy through the consumption of sugar in the last century and the first decade of this century can never be made good, as it has left its mark on the race….

 Dufty concludes “The Mark of Cane” with a quote from Mark Twain’s autobiography.  His uncle ran a general store in Florida, Missouri around 1840.

It was a small establishment…a few barrels of salt mackerel, coffee, and New Orleans sugar behind the counter.  [They had the usual hardware items.] and…a barrel of two of New Orleans molasses and native corn whiskey on tap.  If a boy bought five or ten cents’ worth of anything, he was entitled to half a handful of sugar from the barrel…Everything was cheap…sugar, five cents a pound; whiskey ten cents a gallon.

The author explains that sugar was more expensive than whiskey, but they were pushing free samples on the kids.

By 1840 the sugar pushers and disease-establishment* were solid partners. Washington raked in two cents in federal taxes on every five-cent pound bag of sugar for another fifty years. Addicts supported the government—rather than vice versa—once upon a time. *That part of the establishment—once minor, now major—which profits directly and indirectly, legally and illegally, from human misery and malaise.

End

Fat Heals—Sugar Kills: Chapter 4 – Part 2, Sugar Isn’t Always Sweet

by Dr. Bruce Fife

Chapter 4, Part 2

Glucose—Blood Sugar and Insulin Resistance: continued

Where we left off is Dr. Fife explaining to us that insulin resistance is the hallmark feature and first step towards developing diabetes. We’ll concern ourselves here only with type 2 diabetes and not juvenile diabetes.

In type 2 diabetes, the pancreas may be able to produce enough insulin, but the cells of the body have become unresponsive to the hormone insulin. This is called insulin resistance. Over 90% of diabetics are of this type.

In the initial course of this disease, the pancreas usually can produce enough insulin to overcome the insulin resistance of the cells. However, the demand placed on the pancreas takes its toll, and insulin production eventually begins to decline. Eventually the pancreas can burn itself out and stop producing the insulin needed.

When this happens, type 2 diabetics will require supplemental insulin.

More than half of all those with type 2 diabetes eventually require insulin to control their blood sugar levels as they get older.

My Comments: I hope Dr. Fife’s words will serve as a dire warning to those who consume lots of refined carbs but have yet to be diagnosed as having pre-diabetes. I would hope that it also serves as a wake-up call to those that have been diagnosed as pre-diabetic and have been prescribed metformin. I also hope that the readers that are diabetic and taking metformin and/or other diabetic pills will hear the alarm bells going on as to the path they are headed on if they insist on continuing to abuse their bodies by consuming too many refined carbohydrates.

Dr. Fife warns that half of those will end up requiring insulin if the disease continues to progress. The progression continues with assorted diabetic complications:

  • Skin complications
  • Eye complications: Retinopathy, glaucoma, cataracts
  • Neuropathy: Nerve damage from diabetes is called diabetic neuropathy
  • Foot complications
  • DKA (ketoacidosis) & ketones
  • Kidney disease (nephropathy)
  • High blood pressure—also called hypertension—raises your risk for heart attack, stroke, eye problems and kidney disease.
  • Stroke

Folks, this is serious stuff. The obvious answer is to quit consuming or severely reduce “foods” made from refined carbohydrates. The problem, of course, just as with other addictive substances, refined carbs and particularly sugar in its various forms, are highly addictive.

William Dufty in Chapter 1 of his book, Sugar Blues, had this to say when he quit sugar cold turkey:

In about forty-eight hours I was in total agony, overcome with nausea, with a crashing migraine.

Continuing: Dr. Fife explains that diabetes is diagnosed when fasting blood sugar is 126mg/dL or higher. As insulin resistance increases, so do blood sugar levels. Fife also warns that you are not in the clear if you are at 125mg/dL. He explains that insulin resistance begins when fasting levels rise over 90 mg/dL.

Fife points out the correlations between increased sugar consumption and the increase of diabetes. He also states the reverse:

Eating a low-sugar or low-carb diet significantly reduces the risk [of developing diabetes].

He says that the scientific evidence linking excess sugar consumption with an increased risk of diabetes is strong.

My Comments: The problem here is what is “low” and what is “excess?” In Part 1 of Chapter 4, I quoted some dietary experts’ recommendations of consuming no more than 100 calories of sugar per day. If you are a regular consumer of processed foods, you’ll likely exceed this many times over. Keep in mind that 100 calories worth of sugar is 25 grams or slightly under an ounce or about six teaspoons.

Continuing:

Glycemic Index

The glycemic index (GI) is a measure of how quickly certain foods raise blood sugar levels. The GI is on a scale of 0 to 100. Glucose is given a GI of 100, and all other foods are rated in comparison.

A banana has a rating of 51, but a slice of white bread, by comparison, has a GI rating of 75. While the banana tastes sweeter, its fiber slows down the absorption process. The white bread is pure starch and quickly dumps a high load of glucose into the bloodstream once it’s digested.

Chronic Inflammation

Dr. Fife explains that high glycemic foods tend to increase inflammation.

When blood sugar levels rise, the sugar in your bloodstream tends to latch onto certain proteins in the blood vessel wall, causing injury and inflammation. When you eat high glycemic index foods repeatedly, your blood glucose levels are continually elevated, leading to chronic injury and inflammation.

It is inflammation that causes cholesterol to become trapped in the artery wall. Without inflammation being present in the body, there is no way that cholesterol would accumulate in the wall of the blood vessel. Without inflammation, cholesterol would move freely throughout the body as nature intended.

This chronic inflammation of the arteries is one of the distinguishing features of atherosclerosis and coronary heart disease. In fact, chronic inflammation is associated with diabetes, obesity, Alzheimer’s disease, and just about every other chronic degenerative disease. Ed: My emphasis

My Comments: When certain events happen, the cause-and-effect relationship can be immediate and painful. Accidentally placing your hand on a hot burner will give you immediate and painful feedback to the degree that you minimize your injury and avoid such behavior in the future. The effects of a bee or wasp sting is immediate and painful, and deadly for some. Those that have suffered painful stings take precautions to avoid getting stung again.

If I eat a candy bar, woof down half a bag of Oreos, or splurge on three bowls of my favorite chocolate chip ice cream, do I have a heart attack, have kidney failure, or go into a diabetic coma? Not yet and maybe not for decades. Nothing happens in the immediacy to the toxic load that I have subjected my body to. However, if I persist in this behavior, the effects will accumulate and eventually catch up with me.

The dilemma here for any addiction is that the pleasure derived by tickling the dopamine part of our brain outweighs any concerns of potential long term side effects. And just think, the psycho-physicists that Dr. Fife referenced earlier in this chapter understand this physiological response to pleasure and addiction better than we do. It is their job to ensure that we will really like the manufactured food or beverage they create to the point where we become lifetime consumers. That is their bliss point.

Continuing: Dr Fife states that inflammation can be determined by measuring a marker in the blood called C-reactive protein (CRP); the higher the CRP the more inflammation is present.

He succinctly explains the problem:

In the absence of infection, a primary cause of inflammation is eating excessive amounts of sugar. Sugar causes inflammation and exponentially* increases your chances of developing chronic diseases. Ed: My emphasis

My Comments: What if you made a nicely printed sign that you prominently posted in your kitchen that reads as follows.

EATING TOO MUCH SUGAR IS THE MAIN CAUSE OF INFLAMMATION IN MY BODY AND DRAMATICALLY INCREASES MY CHANCE OF DEVELOPING A MYRIAD OF CHRONIC ILLNESSES.

We can assume that the processed food industry will not be handing such signs out.

*Why does Dr. Fife use the word “exponentially” in his text?  Exponentially means more rapidly and that the speed of the rapidness keeps increasing.

Let’s say Person A consumes no sugar and no refined carbs and has a virtually zero percent chance of developing diabetes.

Person B consumes 500 calories per day of sugar/refined carbs and has 10 times more likelihood of developing type 2 diabetes compared to Person A.

Person C consumes 1,000 calories per day of refined carbs and has 10 times more chance of developing type 2 diabetes compared to Person B or 100 times more chance compared to Person A.

The above figures are hypothetical only, but Dr. Fife’s point by using the word exponentially is that the chances of contracting a chronic illness becomes increasingly higher with the increased consumption of sugar.

Continuing: Dr Fife further discusses chronic inflammation and arterial disease. He makes this key point:

The relationship between chronic arterial inflammation and heart disease is a much better indicator of heart disease risk then blood cholesterol levels.

My Comments: Assuming that Dr. Fife’s above comment is medically correct, then why are so many doctors pre-occupied with blood cholesterol levels? Over the years I have heard many, many people tell me that their doctor said that they have to get their cholesterol levels lower. The remedy is usually to prescribe a statin drug. With one possible exception, I have never heard anyone report to me that their doctor was just as hell-bent to get their blood sugar levels lowered by restricting their consumption of sugar and other refined carbs.

Continuing: Dr. Fife further explains the correlation of C-reactive protein and inflammation to heart disease.

Dr. Paul Ridker of Brigham and Women’s hospital in Boston evaluated blood samples from more than 28,000 healthy nurses. Those with the highest levels of C-reactive protein had more than four times the risk of having heart trouble. “We were able to find that the C-reactive protein is a stronger predictor of risk than were the regular cholesterol levels, and that’s very important because almost half of all heart attacks occur among people who have normal cholesterol levels,” he said.

Dr. Fife suggests that inflammation may explain why people have heart disease without other known risk factors. These are people with normal cholesterol, who are not diabetic, and appear to be in good physical condition. They make up about a third of all heart attack cases.

My comments: To learn more about C-reactive protein (CRP) here is what the Mayo Clinic has to say:

The level of C-reactive protein (CRP), which can be measured in your blood, increases when there’s inflammation in your body. Your doctor might check your C-reactive protein level for infections or for other medical conditions.

Healthline has this to say:

High CRP levels can also indicate that there’s inflammation in the arteries of the heart, which can mean a higher risk of heart attack. However, the CRP test is an extremely nonspecific test, and CRP levels can be elevated in any inflammatory condition.

I looked at other websites, and the information they offered about the link to diet, nutrition, and particularly sugar was scant. One suggested that a Mediterranean diet was beneficial. Another suggested that an unhealthy diet was one contributory factor towards CRP.

Dr. Fife cuts to the chase and lays the blame on high-glycemic foods. And what are high-glycemic foods? Yep, it’s refined carbohydrates which includes white flour and sugar in its various forms. End

 

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Medicare Advantage Funding and the Causes of Non-Renewal Notices

by Lance D. Reedy

For those of you that have received a non-renewal notice from your Medicare advantage company, we encourage you to review our companion article, I Received a Disenrollment Letter: What Now?  It will explain your choices.

Note: In the discussion that follows, I have simplified some concepts for brevity.

History

The concept of Medicare Advantage (MA) plans began with the 1982 Tax Equity and Fiscal Responsibility Act (TEFRA). This act allowed privatized Health Maintenance Organization (HMO) plans to contract with Medicare to deliver a form of privatized Medicare. Health insurance companies later exited this privatized Medicare marketplace because the funding from Medicare wasn’t keeping up with rising costs.

The Balanced Budget Act of 1997 established the Medicare+Choice program. This was renamed Medicare Advantage by one of the provisions of the 2003 Medicare Modernization Act (MMA). It was this act that also stepped up the controversial capitation rate for the MA plans.

Medicare Advantage Funding

MA plans are privatized in that Medicare sends a certain amount of money per person per month to the sponsor, usually a large health insurance company, of the MA plan. This is called the capitation rate. This means that, for example, the base rate that the MA plan sponsor receives from Medicare is about $700 per month for every member enrolled in the sponsor’s plan. Simply put, they get so much per head per month. That’s the capitation rate.

Example: Betty Smith enrolls in the Medicare Deluxe plan from Acme Insurance Co. Her premium is $65 per month. Her plan also includes prescription coverage. Here is the revenue that Acme receives for enrolling Betty as a member:

Medicare Funding for the MA health plan: $700 per month (Note: this can be much higher for people with more health issues.), Medicare Funding for a prescription plan: $53 per month, Betty’s Premium: $65 per month. The breakdown is as follows: $30 is her contribution to the health plan, and $35 is for her prescription part of the plan.

Total: $818 per month

Remember, These Plans are Privatized

Let’s say that Betty has a knee replacement surgery with a total bill of $30,000. Her hospital stay is for three days.  Her plan has a hospital copay of $300 per day with a five-day cap. Acme pays for all days that exceed five.

Here’s how it looks:

Total bill: $30,000

Betty pays $300 per day x 3 days or $900 to the hospital. The hospital bills the balance of $29,100 to Acme, not Medicare. Remember, as far as claims go, Medicare is out of the picture.

Let’s say the Betty had physical therapy after her surgery, some labs, doctor visits and other miscellaneous medical events that cost Acme an additional $4,000 during the course of the year.

Annual Revenue that Acme Received

  • Funding from Medicare = $8,400 ($700/month x 12 months.)
  • Of Jane’s $65 monthly premium, $30 is for her health plan. $30/month x 12 months = $360
  • Total revenue = $8,400 + $360 = $8,760

Claims paid out for Betty Smith

  • Knee surgery: $29,100
  • Miscellaneous other medical services: $4,000
  • Total claims (losses) for covering Betty: $29,100 + $4,000 = $33,100. (Note: To keep this example simpler, we’re ignoring any prescription costs.)

A Losing Proposition

In this example, we can see that Acme losses were almost four times more on Betty’s behalf compared to the revenue they received from Medicare and Betty. Just to break even, Acme Insurance needs three other members’ (Alice #1, Alice #2 and Alice #3) revenue and little or no claims from those members.

As long as Acme only has a few Bettys and lots of Alices, they will be okay. They can maintain their $65 per month premium for 2018, keep their copays about the same, and maintain their extras such as a vision, dental, or health club benefit.

How Acme Insurance Gets in Trouble

In this example, we have the fictitious state of West Mountain. West Mountain has forty counties, and Acme has their MA plans in twenty of them. Acme’s bean counters have observed that they are consistently losing money in Wolf, Grizzly, Coyote, Rattlesnake, and Scorpion counties. These are low population, rural counties. To aggravate this problem, Medicare’s capitation rate in these counties is lower compared to the more urban ones. Worse yet, Acme is having difficulty finding enough specialists to serve on an “in network” basis in those counties.

To stem these losses and maintain the integrity of their Medicare Deluxe plan, Acme has decided to cut loose those five losing counties. They file their plan with Medicare, and they send non-renewal letters to their members in those five counties in early October. Simply put, they had too many Bettys and not enough Alices.

This is exactly what the now defunct New West Medicare did in Montana a few years ago. They had substantial losses in ten counties, so they non-renewed their members in those counties. Medicare advantage plan sponsors cannot drop an individual high claims member, but they can drop a high claims county.

In one rural county that New West dropped, I had one client that had a hip replacement surgery and another that was in the hospital in Billings for two and a half months. There couldn’t have been enough Alices to make up for those two Bettys. Also, there could have been more Bettys that I didn’t know about.

It Gets Worse

Exiting some counties can be a stop gap measure that buys time for a year or two. What happens if the losses begin to mount statewide? That’s what happened to New West in 2016. The decision makers looked at the numbers, and they weren’t good. In October of 2016, all New West MA members received their non-renewal notices.* While there were other factors in New West’s demise, the bottom line is that they lost enough money that they pulled their plans and exited the market. *Important. Be sure to keep your non-renewal notice. You may need it!

The Insurance Company has Another Option

Let’s say that Acme has lost money in most of West Mountain, but they want to stay in the game. Here’s their strategy.

  1. Drop their high loss counties.
  2. Drop their plans in the counties they wish to remain in, but come out with new plans. These new plans will have a combination of higher premiums and/or higher
  3. They also could trim some of their extras such as their vision or dental benefit. Your higher premiums and higher copays will generate more revenue for Acme. If it all works, they will continue to offer their plans.

Things to Remember About Medicare Advantage plans.

  1. Medicare advantage plans are privatized.
  2. The providers bill the plan sponsor (generally insurance companies) and not Medicare.
  3. The insurance company can’t operate at a loss, or it will go out of business.
  4. The company can decide which counties it desires to sponsor MA plans in any given state.
  5. Low population counties may not have any MA plans.
  6. MA plans are subject to premium and copay increases. (In a few instances these have slightly decreased.)

Conclusion

Receiving non-renewal notices for most people is an unsettling hassle. It involves change, and many people, including me, don’t like it. Now your Medicare plan needs to be redone.

I believe that having a basic understanding of how Medicare advantage funding works, can be a useful tool in your decision-making process.

Please click here to consult our companion article, I Received a Disenrollment Letter: What Now?

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PDP Helper

Welcome to the PDP Helper page for Northwest Senior Insurance!

Please follow the instructions below to submit a list of your prescriptions to us so we can help you select a Prescription Drug Plan for 2018.

If you would like some additional guidance on how to use PDP Helper, please check out our PDPHelper Tips article.

Step 1 of 4

Contact Information

Please enter in your contact information so we will be able to get in touch with you.
Not required, but highly recommended so we have an alternate means of communication.

Pharmacy Information

Please enter your pharmacy of choice and, if applicable, any alternate pharmacies you might consider using. Then answer the following two questions.
Some plans offer substantially lower copays with specific retail pharmacies or mail order.

Benefits of a Medicare Supplement Plan

Introduction

The following table lists all of the possible benefits of a Medicare supplement plan. Plan F is the only plan that contains all of these benefits.

Basic Benefits

  1. Part A coinsurance. The Medicare supplement will pay the $315 per day coinsurance for days 61-90 of a hospital stay. The Medicare supplement will pay the $630 per day coinsurance for the 60 lifetime reserve days. The Medicare supplement will pay for 365 additional days of hospitalization after Medicare hospitalization benefits are exhausted.
  2. Medical expenses Part B: The Part B coinsurance is generally 20% of Medicare approved expenses. This includes the coinsurance for outpatient services and surgery. Plans K, L, and N require the Medicare beneficiary to pay a portion for the Part B coinsurance. ***Details below.
  3. Blood: The first three pints of blood.
  4. Hospice: The Medicare supplement pays the hospice coinsurance.

 

Skilled Nursing Facility coinsurance

  1. Medicare pays 100% for the first 20 days for an approved stay for skilled nursing facility care.
  2. For days 21-100 Medicare will pay for an approved stay. There is a $157.50 per day coinsurance that the Medicare supplement pays. ***See below for Plans K and L.

 

Part “A” Deductible

  1. For 2015 the Medicare Part “A” deductible is $1,260 per hospital benefit period. The benefit period is for 60 days and begins after one’s discharge. The Medicare supplement could pay this benefit more than one time per year. .***See below for Plans K and L

 

Part “B” Deductible

  1. 1. The Medicare Part “B” deductible is an annual $147 in 2015.

 

Part “B” Excess (100%)

  1. 1. In general, if a Medicare Part “B” provider charges an excess above the Medicare approved amount, this benefit will pay that amount. Physicians may charge a maximum of 115% of the Medicare approved amount. These are known as non-participating physicians or physicians that do not accept Medicare assignment.

 

Foreign Travel Emergency

  1. In general, Medicare does not pay in foreign countries. One will pay the first $250 for Medical services. After that, the Medicare supplement will pay 80%, and the insured will have a 20% coinsurance. Usually one must pay his/her bill upfront and then bring the bills back to submit a claim.

 

Out-of-pocket limit

  1. 1. For Plan K there is a maximum annual out-of-pocket limit of $4,940. The Medicare supplement will pay 100% after that limit is reached.
  2. 2. For Plan L there is a maximum annual out-of-pocket limit of $2,470. The Medicare supplement will pay 100% after that limit is reached.

 

High-deductible Plan F

  1. High-deductible Plan F pays the same benefits as Plan F after one has paid a calendar year deductible of $2,180. This deductible is for what the Medicare supplement would have paid. Medicare still pays its part when one has high-deductible Plan F. After one has met the deductible, then the plan pays just like a regular Plan F.

 

***Details for Plans K, L, and N

  1. Plan K: Hospitalization and preventative care paid at 100%. Other basic benefits are paid at 50%. Pays 50% of the skilled nursing coinsurance. Pays 50% of the Part A deductible.
  2. Plan L: Hospitalization and preventative care paid at 100%. Other basic benefits are paid at 75%. Pays 75% of the skilled nursing coinsurance. Pays 75% of the Part A deductible.
  3. Plan N: The insured pays a maximum $20 copay for a doctor’s office visit and a maximum $50 copay for an emergency room visit.