Beneficiaries Face Financial Hardship with Proposed Increases in Medicare Cost-Sharing

Beneficiaries Face Financial Hardship with Proposed Increases in Medicare Cost-Sharing

Consumer Advocates Submit Joint Testimony in Opposition to Increased Medicare Cost-Sharing

Sacramento, CA—Testimony opposing proposals that would shift costs to beneficiaries was submitted this week to the Subcommittee on Health of the U.S. House of Representatives Committee on Ways and Means. California Health Advocates (CHA) was one of the three beneficiary advocacy groups that submitted the testimony, along with the Center for Medicare Advocacy and the Medicare Rights Center.

In the testimony, advocates contended against:

  • Increasing the Medicare Part B deductible;
  • Adding cost-sharing to the home health benefit; and
  • Expanding the number of beneficiaries subject to higher Medicare Part B and D premiums.

Advocates point to the potential financial hardship such cost-shifting poses for beneficiaries. For example, increasing the Medicare Part B deductible means higher upfront costs, whichmay lead to self-rationing and postponing care. Similarly, adding cost-sharing to Medicare’s home health benefit could have a staggering impact on the sickest and most vulnerable beneficiaries. In addition, subjecting more beneficiaries to income-related Medicare Part B and D premiums may mean middle-income people paying higher premiums. See Kaiser Family Foundation’s report (PDF) for more info.

“Most beneficiaries would be hard hit by these additional costs,” says Bonnie Burns, Training and Policy Specialist with CHA and a consumer representative of the National Association of Insurance Commissioners (NAIC). Beneficiaries already spend 15% of their income on medical expenses, more than the 5% that an average younger, non-Medicare household spends. Half of the Medicare population has annual incomes of $22,500 or less, or about 200% of the federal poverty level.

In addition to pointing out various specific risks of the proposals, the advocacy groups presented alternative viable solutions to the real problem of rising health care costs in our country. Some solutions include eliminating wasteful spending on drugs, medical equipment and private health plans, and building on the efficiencies of the Affordable Care Act (ACA). Congress could expand the federal government’s tools to achieve this end by: restoring Medicare drug rebates, allowing the federal government to directly negotiate with pharmaceutical companies and introducing a public drug benefit in Medicare.

For a full review of the testimony, see:
Joint Testimony to House Committee on Ways & Means, May 21, 2013 (PDF).

For more information on the current financial plight of beneficiaries, see Kaiser Family Foundation’s recent report:
A State-by-State Snapshot of Poverty Among Seniors: Findings From Analysis of the Supplemental Poverty Measure.

California Health Advocates is an independent non-profit organization that provides quality Medicare and related health care coverage information, education and policy advocacy.  CHA equips community organizations and government agencies with up-to-date information, especially the 24 local HICAPs, which provide benefits counseling and community education directly to those with Medicare and their families.  For more information, visit its website at cahealthadvocates.org.

For more information contact:

Bonnie Burns
Training and Policy Specialist
831-438-6677

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.