The Future of Medicare: Seniors must pay more.by Denise Early on Apr. 05, 2011, under Health
A common theme among the many proposals to reduce Medicare spending is that seniors and the disabled must pay a larger portion of the cost of their health care.
The theory is that when people have to pay more for medical services, they will be less likely to overuse health care. This is called “consumer-driven” health care, where the individual decides to take a pass on physical therapy or knee replacement surgery because they have some co-pay which they deem to be too much. Of course, the question can be asked if seniors will avoid going to the doctor, or getting treatment they really need because of higher co-pays and deductibles.
Kaiser Health News covered some of the proposals for passing on costs to Medicare beneficiaries:
CHANGING MEDICARE’S DEDUCTIBLE AND MEDIGAP COVERAGE: Medicare charges beneficiaries separate deductibles for their hospital care (Part A) and for outpatient and physician services (Part B). This year, in Part A, beneficiaries pay $1,132 for each hospital stay, and enrollees also pay daily co-payments for extended hospital and skilled nursing care. For Medicare Part B, the annual deductible this year is $162. Nearly one in five beneficiaries in Medicare’s fee-for-service program have supplemental insurance known as Medigap coverage to help with those costs.
Some proposals, including one advanced by the president’s deficit panel chaired by former GOP Sen. Alan Simpson and former Clinton chief of staff Erskine Bowles, have suggested combining the Part A and B deductibles into one $550 yearly deductible. That could reduce beneficiaries’ costs for hospital care but be more expensive for seniors who mostly use Part B. In addition, some proposals suggest a 10 to 20 percent co-payment for all services until beneficiaries reach a catastrophic limit. Others argue for making that $550 deductible ineligible for Medigap coverage so that beneficiaries are responsible for covering the cost of those initial services.
How Much Would It Save? Instituting the change in deductibles, co-pays and Medigap rules would save about $93 billion over the next decade, CBO estimates.
The Gain: Medicare would save money, but not just because beneficiaries were putting up more of their own. If Medigap plans were less generous, analysts believe beneficiaries would be more careful about spending and that could help lower Medicare costs.
The Pain: Once again, this proposal would shift costs to individuals.
The full article in Kaiser Health News can be found here.