Press Release
FOR IMMEDIATE RELEASE
Contacts:
David Lipschutz, Staff Attorney
California Health Advocates, 213-381-3670Deane Beebe, Public Affairs Director
Medicare Rights Center, 212-204-6219
September 13, 2007
Standardizing Medicare Private Health Plans' Benefits Will Allow Informed Consumer Choices, Consumer Groups Report Congress Must Standardize Private Health Plans Similar to Medigap Plans New York, NY - Congress must require that the dizzying array of benefit packages available through Medicare private health plans be standardized, to help Americans with Medicare make informed decisions about choosing a health plan and to protect them from unexpected, high out-of-pocket costs, according to the California Health Advocates and Medicare Rights Center in a new report.
"Medicare private health plan benefits need to be standardized so that older Americans and those with disabilities have the right information to make apple-to-apple comparisons among their many health plan options," said Clare Smith, president and CEO of California Health Advocates, a Medicare advocacy organization. "The consequences of a wrong plan choice can be devastating to consumers' health and their pocketbook, especially since plan choices are often irreversible."
The lack of standardization in private health plan benefit packages make it difficult or impossible for consumers to compare Original Medicare with a Medigap supplement and Medicare private health plans, as well as between the widely varying benefits of private plans, the consumer advocates report in "Informed Choice: The Case for Standardizing and Simplifying Medicare Private Health Plans."
"It's time for Congress to step in to protect Americans with Medicare as Congress did when it regulated the sale of Medigap plans," said Robert M. Hayes, president of the Medicare Rights Center, a national consumer group. "Standardizing plan benefit packages will ensure that plan benefit designs are transparent and will curtail the rampant market deception faced by older Americans."
Congress mandated standardization of the Medicare supplemental insurance plans in 1990.
"Informed Choice: The Case for Standardizing and Simplifying Medicare Private Health Plans" illustrates these serious deficiencies in the 2007 benefit packages of Medicare private health plans that consumers may not know about until they are enrolled in a plan and get sick:
- consumers suffering from chronic illness can incur widely varying levels of cost-sharing under different plans;
- many plans do not provide a limit on enrollees’ annual out-of-pocket spending for medical services or exempt certain services, such as chemotherapy, from such limits;
- many plans charge more than Original Medicare for specific services, such as inpatient hospital care, nursing home stays or home health care.
Before deciding on a health plan, consumers need to consider provider access; utilization restrictions on medical care; out-of-pocket costs, including plan premiums, copayments and coinsurance for medical services; and drug coverage through either a private health plan or stand alone plan, the groups report.
The California Health Advocates and Medicare Rights Center recommend that the National Association of Insurance Commissioners establish an expert panel including state insurance regulators, consumer representatives and representatives from both the plans and the Centers for Medicare & Medicaid Services to develop model regulations. The development of standard benefit packages should seek to accomplish these goals:
- Make it easier for consumers to compare a limited number of alternative plans;
- Protect consumers against catastrophic medical expenses, regardless of the type of illness, site or type of medical service;
- Ensure that out-of-pocket costs for individual medical services, such as home health services or inpatient services, are equivalent to or less than the out-of-pocket costs imposed by Original Medicare.
"Informed Choice: The Case for Standardizing and Simplifying Medicare Private Health Plans" was released following a National Association of Insurance Commissioners’ public hearing on problems surrounding the regulation of Medicare private plans. Both the California Health Advocates and Medicare Rights Center testified at the hearing.
"Informed Choice: The Case for Standardizing and Simplifying Medicare Private Health Plans" is available online at http://www.medicarerights.org/MRC-CHA_MAstandardization.pdf.
California Health Advocates is dedicated to Medicare beneficiary advocacy and education efforts for Californians (www.cahealthadvocates.org).
Medicare Rights Center is the largest independent source of health care information and assistance in the United States for people with Medicare (www.medicarerights.org).