Lieberman-Coburn Medicare Proposal Would Raise Costs for People with Medicare
The proposal also includes a major restructuring of the Medicare benefit that would limit costs to the government but increase costs for the majority of Medicare consumers. Specifically, the proposal creates a combined Part A and Part B deductible of $550, a universal 20 percent copay for all services under Medicare, and an out-of-pocket limit of $7,500. In addition, it would institute a Medigap deductible and limit future coverage protection offered by Medigap plans. Thus, many would have to pay $550 out of pocket before receiving Medicare coverage and would be responsible for copays for services like home health, for which none have existed in the past. Even with increased out-of-pocket costs, most people with Medicare would never reach an out-of-pocket limit set so high. Lastly, the purpose of eliminating or limiting Medigap coverage is to drive down utilization by Medicare consumers, who are in a poor position to determine which services are medically necessary. The
There are, however, proposals that would reduce government spending without shifting costs to the Medicare population. This month, Senator Jay Rockefeller and Representative Henry Waxman introduced the Medicare Drug Savings Act of 2011 (S. 1206/H.R. 2190). Similar to the rebates that existed before the implementation of Part D by the Medicare Modernization Act (MMA), the proposed legislation would require drug manufacturers to pay a rebate to the government for drugs provided to dual-eligible beneficiaries and would further extend such rebates to people with Medicare enrolled in the low-income subsidy (LIS) program. The Congressional Budget Office (CBO) estimates that this proposal would save an estimated $112 billion over 10 years. Most importantly, this legislation does not achieve savings to Medicare by increasing costs to people with Medicare, who already spend about 15 percent of their total household incomes on health care.
Read Medicare Rights Center President Joe Baker’s statement on the Lieberman-Coburn proposal.