Perspective               

Bush Administration Proposes New Medicare Supplemental Insurance Plans

The Bush Administration has proposed two new standardized Medicare supplemental insurance plans, also called Medigap insurance, to add to the 10 plans already in existence-lettered A through J. The new plans will provide some prescription drug coverage-similar to Medigap plans H, I, and J-but will have high deductibles, requiring people with Medicare to pay several hundred dollars our of their own pockets before coverage begins. The trade-off for the high deductibles will be lower premiums than those for plans H, I, and J.

The Bush Administration, saying that some people with Medicare use care unnecessarily, is proposing these high deductible, low premium plans to create an incentive for people enrolled in Medigap plans to not use care. And while these types of plans might save the Medicare program money, they would raise out-of-pocket costs for people with Medicare and likely prevent some people from getting needed care because they would not be able to afford it.

People with Medicare already struggle to pay for the care they need, particularly prescription drugs. They need ways to lower their out-of-pocket costs to ensure they get needed care. Raising costs is likely to jeopardize access to care further. One way to lower costs and ensure access to care for people with Medicare would be to offer a Medigap plan through Medicare, with a modest deductible. Adding supplemental coverage options to Medicare would give the millions of people with disabilities under the age of 65 the right to buy supplemental coverage, increasing their access to needed care. It could also spread risk more broadly and help stabilize supplemental insurance premiums.

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