House Committees Return to the Capitol with More of the Same

The House Energy and Commerce Committee and House Committee on Ways and Means recently released the first in a series of discussion papers identifying what they believe to be key flaw in the existing traditional Medicare framework and detailing their own concepts for reforming the Medicare program. The discussion paper reviewed Medicare cost-sharing, the effects of supplemental insurance, or Medigap plans, and ways in which “modernizing” cost sharing in traditional Medicare would reduce overall Medicare costs. The discussion paper proposes establishing a single combined annual deductible for Medicare Part A and Part B, changing current coinsurance rates and adding an out-of-pocket spending maximum. According to the House Committees, beneficiaries who purchase supplemental insurance plans, or Medigaps, in order to protect themselves against Medicare’s cost sharing requirements have an “incentive” to see the doctor more often because their out-of-pocket costs are covered by the Medigap plan, giving them so-called “first-dollar” health coverage. According to the House Committees, these beneficiaries over-utilize services, thus increasing costs in the Medicare program overall. However, eliminating first-dollar Medigap coverage shifts costs to Medicare beneficiaries who purchase Medigap insurance as a means of protecting themselves against high out-of-pocket expenses. Further, the other components of the plan that would “simplify” Medicare could also shift costs to people with Medicare as laid out in the discussion paper. Proposals like those mentioned above, as well as others like raising the eligibility age, increasing premiums for wealthy individuals, and increasing cost sharing on Medicare supplemental plans, save money in Medicare by shifting costs to older adults and people with disabilities. These proposals fail to address the real threat to our nation’s economic health—rising costs throughout the health care system. In contrast, Medicare Rights Center supports solutions that eliminate wasteful spending and promote the delivery of high value care, thus increasing quality while saving money in Medicare.