Your Weekly Medicare Consumer Advocacy Update
Why Costs Shouldn’t be Shifted to People with Medicare
Analysis Confirms High Health Care Costs for People with Medicare
The Kaiser Family Foundation (KFF) recently released an updated analysis of out-of-pocket health care costs in Medicare households as compared to non-Medicare households. The issue brief, “Health Care on a Budget: The Financial Burden of Health Spending by Medicare Households,” assess how much Medicare beneficiaries are spending on their health care compared to other expenses and how this spending changes over time.
KFF found that Medicare households spent 14 percent of their budget on health care costs in 2012, compared to 5 percent among non-Medicare households. This percentage increases with age—Medicare beneficiaries end up spending more of their budget on health care as they get older. Additionally, Medicare households with modest incomes spend more of their budget on health care than Medicare households with higher incomes.
Most of the money Medicare beneficiaries spent on their health care in 2012—over 65 percent—went towards paying health insurance premiums for Medicare Part B, Medicare Advantage plans, Medicare Part D (prescription drug coverage) and supplemental health coverage, such as Medigap and retiree health plans. The share of Medicare household budgets that went towards health insurance premiums remained fairly steady between 2002 and 2012.
Medicare Rights believes it is imperative that Medicare beneficiaries are able to continue to afford Medigap supplemental plans that help them predict and budget for their health care costs. Some policymakers propose adding a surcharge (or tax) to Medigap premiums, or eliminating or discouraging first dollar coverage under Medigap plans—meaning people would pay a larger share of health care costs through increased deductibles, coinsurance and/or co-pays. These proposals achieve savings solely by shifting costs to people with Medicare, many of whom are not in a position to pay more.
Rationale for Recent Medigap Reform Proposals Explained
Also this week, the Kaiser Family Foundation (KFF) released an issue brief providing background on the various proposals to reform Medicare supplemental insurance, also known as Medigap. To help cover and budget for the cost-sharing requirements of Medicare, many beneficiaries look to these supplemental policies. In order to reduce costs in Medicare, with an aim to reduce the national deficit, legislators have considered various options, including reforming the Medigap insurance market.
According to findings in some recent studies, people with Medicare and a Medigap tend to use more Medicare services than those without a supplemental policy resulting in higher Medicare spending. Many of the proposals to change Medigap stem from this assumption and, therefore, seek to limit participation in Medigap by reducing its coverage or making it more expensive.
Yet, Medicare Rights believes that increased Medigap cost sharing wrongly places the burden on beneficiaries—as opposed to providers—to self-ration and decide what treatments they need or may not need. Prohibiting or discouraging Medigap first dollar coverage would bring the most harm to those beneficiaries who have the greatest need for coverage—the sickest individuals and people with low- and modest-incomes.
To provide insight into the population that would be affected by proposals to change Medigap, the KFF brief looks at recent data on Medigap enrollment and premiums sorted by state, beneficiary characteristic and plan. Additionally, the brief explores the current impact Medigap plans have on a beneficiary’s health care coverage and what affect Medigap reforms would have on their coverage.
Volume 5, Issue 2
You can switch from your Medicare private health plan (except MSA plan) to Original Medicare during the Medicare Advantage Disenrollment Period (MADP). You can only make this coverage change if you have a Medicare private health plan (also known as a Medicare Advantage plan). The MADP will occur every year starting in 2011, from January 1 to February 14.
If you have a Medicare private health plan you will be able to switch to Original Medicare with or without a stand-alone prescription drug plan. Changes made during this period will become effective the first of the following month. For example, if you switched from a Medicare Advantage plan to Original Medicare and a stand-alone prescription drug plan in February, your new coverage would begin March 1.
If you are enrolled in a PFFS plan with a stand-alone drug plan, you must keep your stand-alone prescription drug plan if you switch to Original Medicare during the MADP.
If you disenroll from your Medicare private health plan (Medicare Advantage plan) federal law does not usually give you the right to buy a Medigap plan. The laws in your state might give you more rights. Medigap plans are supplemental polices that help pay for Original Medicare deductibles and coinsurances. You should check with your SHIP (State Health Insurance Assistance Program) to find out if and when you can enroll in a Medigap plan in your state.
This week, NY State of Health, New York’s official health insurance marketplace, released a report on the demographic data of more than 230,000 New Yorkers who enrolled in health care coverage effective January 1st. The NY State of Health marketplace and the federal marketplace offer health insurance options to people currently uninsured, and is not intended for people with Medicare.
As of January 12th, almost 300,000 individuals enrolled in coverage through the marketplace. According to Donna Frescatore, Executive Director of NY State of Health, “[New York is] on track to meet, if not exceed our goal of 1.1 million by the end of 2016.” The open enrollment period for NY State of Health will continue through March 31st.