As you may remember, the passage of the Accountable Care Act required to National Association of Insurance Commissioners (NAIC) to consider adding cost-sharing to Medigap Plans C and F. Bonnie Burns, our Training and Policy Specialist, was on the subgroup addressing this issue for almost 2 years. All their research continually showed that beneficiaries would only be harmed by such a policy, with little to no money saved in the long-term. Also, such suggested cost-sharing changes were based on the erroneous assumption that overall health care costs would go down if beneficiaries had “more skin in the game,” meaning they paid more upfront for their care and services. Yet Medicare beneficiaries already pay a significantly higher percentage of their annual income on health care costs than the average non-Medicare person younger than 65 (15% versus 5% respectively). Also, half of the Medicare population has annual incomes of $22,500 or less, or about 200% of the federal poverty level. This population has little wiggle room in terms of pushing more of the burden of an expensive health care system onto the shoulders of beneficiaries.
In addition, the NAIC subgroup found that increased cost-sharing would very likely cause beneficiaries to limit the use of both necessary and unnecessary health care services. As a result, studies show that delays in seeking primary care services often result in worsening health conditions and would shift costs to more intensive inpatient settings at higher costs to the Medicare program. “Studies also show,” says Burns, “that once beneficiaries do seek care, doctors and other medical providers, not patients, determine the number and types of health care services beneficiaries receive.”
After 2 long years of advocating against added cost-sharing in Medigaps, including sending out multiple press releases, posting articles and providing Congressional testimony, we are thrilled to hear that NAIC’s conclusions are accepted. The Health and Human Services Secretary, Kathleen Sebelius recently agreed to accept NAIC’s conclusions that additional cost-sharing in Medigap would be detrimental to Medicare beneficiaries already struggling with a higher percentage of medical expense than younger people. This is a huge victory for consumer groups and beneficiaries nationwide!
See some of our advocacy efforts on this issue by reading the links to article, press releases and Congressional testimony below:
- Medicare Redesign Proposals Pose Significant Risks to Beneficiaries
- Joint Testimony to House Committee on Ways & Means (February 26, 2013)
- NAIC Letter to Secretary Kathleen Sebelius (December 19, 2012)
- “Skinning” Medicare Beneficiaries
- Lawmakers Propose Cuts to Medicare and Medigap Coverage