I came across this article today and thought I’d share it.  I have seen other articles about how our tax system, with so many loopholes, benefits the biggest, richest corporations.  I recently wrote about this when I discovered that Corporate income taxes amount to only 9% of federal revenues. Now I know why.

The full column by Lynn Sweet can be found here.

WASHINGTON—With federal income taxes due in a few weeks, Sen. Bernie Sanders, the Vermont independent allied with Democrats, on Sunday released a list of ten big profitable U.S. companies paying little or no taxes. Sanders wants to close the loopholes that make this tax avoidance legal. Some people call the income tax system with generous loopholes for big companies corporate welfare or corporate entitlements. As Congress returns to work this week–after yet another break–to negotiate over big budget cuts–with social safety net programs facing reductions–Sanders is pushing for corporations to pay more of a fair “share.”

The Bernie Sanders Ten, per release….

1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.

2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.

3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.

The rest of the article can be found here.

Last week I met with a new client who recently moved to Arizona from Colorado.  Jerry was enrolled in a Medicare Advantage plan in Colorado and was pleasantly surprised to discover that most Advantage plans in Tucson don’t have monthly premiums.

Jerry paid $115 per month in Colorado for a Medicare Advantage plan that was very similar to what he can get in Arizona for $0.  So Jerry was pretty much set on enrolling in a Medicare Advantage plan which would be an HMO with a network based in Tucson.

I told Jerry I needed to go over all of his Medicare options because he qualifies for a special enrollment period in a Medicare supplement due to his move.  I told Jerry he could get a Plan F Medicare supplement for a bit more than he was paying for his Colorado Advantage plan. He would not have to answer any medical questions on the Medicare supplement application because he is “guaranteed issue” due to his move.

Medicare Advantage plans might have a $0 monthly premium, but they come with co-pays every time a person receives any medical service.  I told Jerry he could get a Medicare supplement Plan F that would give him full coverage and no co-pays for medical care. That is because Medicare will pay first and his Plan F Medicare supplement will pay the balance of his bill.

I told Jerry he had two very different choices for his Medicare coverage: Medicare Advantage or Medicare plus a Medicare supplement.  So we looked at the pros and cons of each.

After lengthy discussion and lots of questions, Jerry decided to go with a Medicare supplement. I told Jerry the only bad thing about Medicare supplements is that the monthly premium will go up over time.  But, if he ever decides the supplement premium is too high, he can go back to Medicare Advantage.

Next,  Jerry had to sign up for a Part D drug plan, which was a bit confusing for him because his Colorado Medicare Advantage plan came with a drug plan.  I told him he had to get a “stand-alone” Part D plan, so I took a list of his drugs and set about to find him a Part D plan that covered all of his prescriptions and would give him the best deal on his drug costs.

After identifying the best Part D plan for Jerry (by using the Medicare.gov plan finder), I was going to have him just call the company to sign up over the phone. But trying to explain his Part D choices over the phone  was too confusing for Jerry – and would be for anybody.  So I spent an hour researching the best Part D plan for him and one hour explaining it to him in-person the next day.

As we concluded our meeting, Jerry pointed out how confusing Medicare and Part D are, and I agreed with him. But I had to acknowledge that the numerous and confusing Medicare choices make for a good business environment for an insurance broker like me.  With numerous choices for Medicare coverage and far-too-many choices for Part D, seniors really need the help of insurance brokers – like me.

Next:  Picking a Part D plan

For more information on Medicare choices, see my website.

Some critics of Medicare Advantage point out that these Medicare replacement plans offered by insurance companies tend to enroll healthier seniors. Healthier seniors with lower medical costs would lead to higher profit margins for insurance companies, which are paid a monthly amount by Medicare for each person enrolled in their Medicare Advantage plan.

But it turns out that having unhealthy seniors in a Medicare Advantage (MA) plan can actually be a good thing.  This is because the payment received by MA plans is based on the risk scores of their members, according to an article I found on healthcaretownhall.com.

According to the article, CMS (Centers for Medicare and Medicaid) assigns a risk score to every person enrolled in a Medicare Advantage plan based on age, gender, disability status, and health status.

Health status is based on medical treatments the member received in the previous year and covers 80 different conditions, each with its own code and risk adjustment factor.

So if a senior enrolled in an MA plan has Diabetes, his risk score increases by a certain amount, resulting in an additional payment to the MA plan of about $100 per month.  Medicare Advantage plans in Arizona are paid around $800 per month for a healthy person, according the the Medicare Advantage Plan Tracker at kff.org

A good example of a company benefiting from higher payments for sicker members is CareMore, a California-based Medicare Advantage company that came to Tucson two years ago and expanded to Phoenix in 2011.  CareMore has several MA plans in Tucson and Phoenix which target seniors with chronic illnesses such as Diabetes, breathing disorders, or heart disease.

CareMore gets more money from Medicare for becoming the Medicare replacement plan for seniors with chronic illnesses, and then tries to keep their members from ending up in the hospital.  The result is a very healthy profit margin for CareMore, while members of their plans get a lot of attention aimed at keeping them stable.

CareMore also has their Value plan which does not require a senior to have a chronic illness.  But CareMore gets the correct risk assessment payment by doing an in-person health assessment for every person who joins their Medicare Advantage plan.  That assessment includes taking a verbal health history from the senior and asking what they are concerned about regarding their health.  The meeting in a CareMore center also includes a blood pressure check and blood tests for cholesterol and sugar levels.

Other Medicare Advantage plans assess their members by reviewing their medical records, including doctor charts if they have been hospitalized. This can get expensive for MA plans, so they don’t do it for every person enrolled in their plans.

When Medicare Advantage plans were originally proposed, they were supposed to save Medicare money by shifting the risk to insurance companies.  The risk assessment payments have made Medicare Advantage a less risky business for insurance companies and more expensive for Medicare.