Thursday, June 20, 2013

Fwd: qotd: Redesigning Medicare cost sharing

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Subject: qotd: Redesigning Medicare cost sharing
Date: Thu, 20 Jun 2013 11:05:12 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Health Affairs
Health Policy Briefs
June 20, 2013
Restructuring Medicare

To reduce federal spending, advance entitlement reform, and simplify
benefits, policy makers have proposed redesigning Medicare cost sharing.

What's The Issue?

Some policy makers have recommended redesigning the program to protect
beneficiaries from high out-of-pocket spending, better align incentives
to reduce overuse of services, and potentially lower costs for the
federal government. Opponents of such reform efforts fear that, in
trying to reduce federal spending, reforms will shift costs onto
beneficiaries and could make them less likely to seek needed care.

What's The Debate?

Supporters of redesign believe that cost sharing under a redesigned
Medicare program will be more predictable and simpler for beneficiaries
to understand and better align incentives to reduce any overuse of
services. Others fear that, if designed to reduce federal spending,
restructuring the benefit design would likely shift costs onto many
Medicare beneficiaries. Critics note that Medicare beneficiaries already
spend three times as much of their income on health care as do people
under age 65. Critics believe most beneficiaries cannot afford to pay
more for their health care and are particularly concerned about
proposals that include even higher deductibles or out-of-pocket caps.

Reforms of supplemental coverage, particularly efforts to limit
first-dollar coverage, are also controversial. Opponents particularly
question the wisdom of Medigap reforms that would likely reduce
beneficiaries' use of both necessary as well as unnecessary services.

The National Association of Insurance Commissioners (NAIC) recently
recommended that the Department of Health and Human Services not add
cost sharing to Medigap plans. NAIC noted that supplemental plans have
little ability to change what care Medicare beneficiaries seek as well
as how effective it is: The Medicare program determines what services
are covered or not covered, and physicians guide individual
beneficiaries on what particular care they need. NAIC expects that
beneficiaries are unlikely to disagree with physicians about whether
specific care is necessary, regardless of financial incentives.

What's Next?

Medicare redesign remains a topic of interest on Capitol Hill. The House
Ways and Means and Energy and Commerce Health Subcommittees held
hearings on this subject on February 26 and April 11, respectively. Ways
and Means Subcommittee Chair Kevin Brady (R-TX) indicated that he
expected to hold more hearings on the future of Medicare and hoped to
forge a bipartisan approach to reforming the program.

Comment: The topic of "entitlement reform" doesn't go away. Regarding
Medicare, virtually all proposals under current consideration include
mechanisms of shifting more costs onto the beneficiaries. As this policy
brief states, "Medicare beneficiaries already spend three times as much
of their income on health care as do people under age 65." We cannot
place this additional burden on those who need health care the most.

The National Association of Insurance Commissioners agrees that cost
sharing should not be added to Medigap plans, for the reasons mentioned
above. Why should only those with Medigap plans be protected? The
Medigap benefits need to be folded into the traditional Medicare program
so that all can benefit by having financial barriers to care removed.

Sadly, the political momentum is moving in the opposite direction -
"saving" Medicare by making it less affordable and therefore less
accessible for those who need it. Do we simply sit back and watch it
happen? If so, "Improved Medicare for All" will continue to wither as a
health care justice goal for the nation.

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