Medicare Watch

Deficit-Reduction Update

As the supercommittee continues to meet in public and in private, policymakers in the administration and Congress continue to weigh in. To help people with Medicare and others understand President Obama’s proposal to the supercommittee, which was released last week, Medicare Rights Center has developed a fact sheet that examines the positive and negative implications of different elements of the plan.

Congressional offices have also begun to promote their own ideas, some of which specifically target Medicare. Senator Joseph Lieberman and Senator Thomas Coburn continue to promote a plan they introduced in June that would cut Medicare by more than $500 billion, largely by shifting costs to beneficiaries and limiting access to care. In response to the Lieberman-Coburn plan, Medicare Rights Center President Joe Baker stated, “Proposals that shift costs to Medicare beneficiaries to save the federal government money, such as the one released today by Senator Lieberman and Senator Coburn, will do exactly what they are expected to do—cause people with Medicare, especially the half who have incomes under $22,000 a year, to avoid going to the doctor and seeking other necessary health care because they cannot afford to do so.”

Polls demonstrate that Americans, regardless of political affiliation, largely oppose cuts to Medicare and Social Security and favor reducing the deficit through increased revenues over cuts to the programs. A recent national poll sponsored by the National Committee to Preserve Social Security & Medicare and Lake Research Partners found that 70 percent of poll participants opposed cutting Medicare and Social Security and 79 percent said that they would rather raise taxes on the wealthy than cut Medicare and Social Security to reduce the deficit. 

Read Medicare Rights Center’s fact sheet “Deficit Reduction and Medicare: President Obama’s Plan.”

Read Medicare Rights Center President Joe Baker’s full statement on the Lieberman-Coburn proposal.

Read the results of the poll sponsored by the National Committee to Preserve Social Security & Medicare.  

Proposals to Change Medigap Would Affect Most Medigap Policy Holders

The majority of people with Medigap insurance are in plans affected by deficit-reduction proposals that would limit initial Medigap coverage or require people to pay more for those plans, according to an issue brief released this week by the Kaiser Family Foundation. Medigap plans are supplemental insurance sold by private insurance companies to help cover the comparatively high out-of-pocket costs in Medicare.

Medigap has become a target of deficit reduction because some studies have found that most, but not all, Medicare beneficiaries with Medigap policies use more services than those without any supplemental coverage. Some proposals to alter Medigap would eliminate first-dollar coverage offered under plans—essentially creating Medigap deductibles—and limit coverage after the deductible is met. Other proposals impose excise taxes on insurers who offer Medigap plans or, in the case of President Obama’s plan, recommend creating a 30 percent surcharge on Part B premiums beginning in 2017 for new beneficiaries who choose Medigap policies that include first-dollar coverage. 

According to the brief, 59 percent of people with Medigap are in plans that offer first-dollar coverage. All deficit-reduction proposals would have the greatest impact on states with the highest Medigap enrollment, which are also states that have the highest number of people in plans that provide first-dollar coverage. For example, in Iowa, Kansas, Nebraska, North Dakota and South Dakota, more than one-third of all Medicare beneficiaries are enrolled in plans that offer first-dollar coverage. Proposals that would create a tax or surcharge for plans that offer first-dollar coverage would disproportionately affect states whose premiums are already highest for those plans, including New York, New Jersey, Louisiana and Texas. 

The National Association of Insurance Commissioners sent a letter last week to the supercommittee outlining its concerns about proposals that would affect Medigap. The letter not only discussed the legal obstacles of revoking coverage for affected people who are currently in Medigap plans, but also discussed implications for future beneficiaries—more specifically, that requiring people to pay more for care may prevent them from receiving necessary care.

Read the Kaiser Family Foundation’s issue brief “Medigap Reform: Setting the Context.”

Read the National Association of Insurance Commissioners’ letter to the chairs of the supercommittee.

 

Medicare Reminder

If you have supplemental insurance for Original Medicare, also known as a Medigap, the cost of your policy depends on the type of Medigap plan you choose and the company you buy it from.

When you have chosen the plan you want from the standardized Medigap plans, it pays to shop around. Plans with the same letter name offer the same benefits, but the premiums vary from company to company. For example: Plan A bought from insurance company 1 has the same benefits as Plan A bought from insurance company 2, but insurance company 1 and insurance company 2 charge different rates.

When choosing a Medigap, ask what factors the Medigap company uses to set your premium. The following factors may affect the cost of your Medigap:

• Where you live
• Your age
• Your health status
• Your gender
• If you smoke
• If you are married

Learn more about Medigap costs at www.medicareinteractive.org.

Spotlight

As the start of Medicare enrollment season on October 15 fast approaches, the Medicare Rights Center has developed a Fall Open Enrollment resource. Written for journalists but useful for anyone with an interest in Medicare, including beneficiaries, caregivers and professionals, the resource outlines key resources, tried-and-true advice for beneficiaries and Medicare changes in 2012.

Read the Fall Open Enrollment resource.