Posts tagged ‘Health Reform & Next Steps’

Medigap – Fact & Fiction

Myths: True v. FalseNearly one in five Medicare beneficiaries rely on Medicare Supplemental insurance policies (Medigap) to fill in the gaps of some of their Medicare coverage.  As noted by the Kaiser Family Foundation, “Medigap policies help shield beneficiaries from sudden, relatively high out-of-pocket costs due to an unpredictable medical event, and also allow beneficiaries to more accurately budget their health care expenses, which is important to a population living on a fixed income” (Kaiser Family Foundation, “Medigap Reform: Setting the Context” Sept. 2011;

Unfortunately, among the proposals raised to achieve savings for Medicare as part of ongoing debt and deficit reduction talks, some policy-makers have suggested changing the way Medigap policies are structured. Under the assumption that charging beneficiaries more upfront will deter them from using unnecessary medical care, these proposals seek to increase Medigap deductibles and other cost-sharing.  Such proposals are found in the Simpson-Bowles Debt Reduction Commission proposal, the President’s Plan for Economic Growth and Deficit Reduction, and have been echoed in the media. (See, e.g., a recent Washington Post editorial “Mind the Medigap” October 1, 2011.)

MYTH: Eliminating First-Dollar Medigap Coverage Will Lead To Beneficiaries Choosing Only Necessary, “Higher Value” Health Care Services

Many of the proposals to reform Medigap coverage aim to achieve Medicare savings by creating “financial incentives for newly eligible beneficiaries to seek high-value health care services.” (See, for example, the President’s Plan for Economic Growth.)  However, as discussed in our recent CMA Alert, many so-called cost-saving measures are based on the misguided assumption that greater out-of-pocket expenses will lead to more reasonable decisions about obtaining various types of unnecessary or “low-value” medical care. (See CMA Alert at:

On the contrary, these proposals would at best fail to steer people toward high-value services and, at worst, would charge people more for obtaining needed health care, or deter them from seeking care altogether.

FACT: As Cost-Sharing Goes Up, Utilization of Services – Both Necessary and Unnecessary – Goes Down. 

Raising cost-sharing for beneficiaries will discourage utilization of health care, including necessary services.  The National Association of Insurance Commissioners (NAIC), the organization of state insurance regulators who oversee Medigap plans, recently warned of just such dire consequences:

It is important to note that the proposed changes will impact cost-sharing coverage for “medically necessary” services. By contract, Medigap policies only pay cost-sharing for items and services that Medicare itself has already determined to be medically necessary. The NAIC is concerned that the effects of this proposal will result in many seniors foregoing needed medical care because they cannot afford the care resulting in more costs to the Medicare program later on.  Additionally, the proposal will simply shift more costs onto seniors (who by and large are not wealthy) and not address the underlying cause of increased medical costs.  (Emphasis added.)

National Association of Insurance Commissioners, Letter to the Joint Committee on Deficit Reduction (September 21, 2011),

October 13, 2011 at 2:24 pm Leave a comment

Fact: Health Care Reform is Good for Medicare

March 23rd marks the first anniversary of the health care reform law. Health care reform is good for people and good for Medicare. It provides a boost for Medicare solvency and adds important benefits for Medicare beneficiaries. It also provides new coverage for sick children and for uninsured young adults. In these ways, older people, people with disabilities and their families are already benefiting from health care reform; they stand to gain even more in the years ahead. Unfortunately, efforts to repeal the law and to stop funding its implementation, threaten the future of Medicare and the improved benefits for Medicare beneficiaries and their families.

The Center for Medicare Advocacy has already seen how health reform has improved the lives of Connecticut’s 560,000 Medicare beneficiaries. For example, as a result of the health care reform law:

• Medicare beneficiaries no longer have to pay for preventive services such as mammographies, prostate screenings, glaucoma screenings, and diabetes management.
• Medicare beneficiaries are now able to have an annual wellness visit and to develop a health plan with their physicians.
• Medicare beneficiaries with particularly high medication needs are paying less for their medicines.
• Major efforts to eliminate fraud and waste in Medicare are underway.
• Billions of dollars in overpayments to private Medicare Advantage (MA) health plans are being phased out; while bonuses will be paid for those MA plans that do a laudable job.
• The long-term solvency of the Medicare program has been extended by approximately 12 years, until 2029.
• Families also benefit because older and disabled people have better Medicare coverage and security, insurance companies are prohibited from denying access to children with pre-existing conditions, and young adults up to age 26 can now get coverage under their parents’ health insurance.

All these benefits will end if the bills in Congress to de-fund health care reform pass, or repeal efforts succeed. The myriad additional benefits going into effect between now and 2014, when health care reform is fully implemented, will disappear. Medicare costs to taxpayers and beneficiaries alike will increase dramatically and the Medicare program itself will be in jeopardy.

Health care reform is good for Medicare, good for Medicare beneficiaries, and good for families. Funding and implementation of the law should proceed.

March 23, 2011 at 2:20 pm Leave a comment

Medicare’s 45th Anniversary: Promise Kept and Promises to Keep

July 30th marks the 45th anniversary of Medicare. When President Johnson signed the Medicare program into law in 1965, he ushered in an era of better health and financial security for older Americans and their families. Medicare did what private insurance failed to do – provide health coverage for people age 65 and older. Over the years Medicare was expanded to cover other people not popular with private insurance: people with disabilities, End Stage Renal Disease and Amyotrophic Lateral Sclerosis (also known as Lou Gehrig’s Disease). Today, 47 million older and disabled people receive health insurance and access to health care through Medicare.

In 2010, when President Obama signed the Affordable Care Act (ACA) into law (also known as the health care reform law), he helped ensure a brighter financial future for Medicare, better coverage for beneficiaries, and reduced costs for beneficiaries and taxpayers.  Health care reform will extend the solvency of the Medicare Trust Fund by about twelve years, add preventive benefits without cost-sharing for beneficiaries, and improve the Part D prescription drug program. It will likely result in reduced Part B premiums for most beneficiaries.  Health care reform will also slow the privatization of Medicare that over the past decade has added costs without corresponding benefit. In 2010, therefore, it’s particularly important to remember and celebrate the effect that Medicare has had on this country, and its importance to the daily lives of millions of Americans.

We forget what it was like before Medicare (and Social Security and Medicaid). Before Medicare, half of all older people had no insurance. Private insurance companies did not want to cover this population because of their age and chronic conditions. When health insurance was available, many older people could not afford it. In 1965, 25% of Medicare beneficiaries lived in poverty.  Medicare has enhanced the health and financial security of older people and their families; they no longer have to worry about paying for catastrophic medical costs.  Because of Medicare, virtually all Americans age 65 or older are insured.

Medicare has had a remarkably broad, positive impact on the country’s well-being in so many ways. Did you know, for example, that by refusing to pay for care at segregated facilities, Medicare helped desegregate hospitals and other health care institutions?

Today, traditional Medicare continues to be one of the most flexible health insurance programs available. The program covers care provided by a broad array of doctors, hospitals, home health agencies and other health care providers. The 75% of Medicare beneficiaries who are currently in the traditional Medicare program can choose virtually any doctor, hospital, or other provider that accepts Medicare, anywhere in the country.

Further, unlike people who receive health insurance through private insurance coverage, Medicare beneficiaries don’t have to worry about having their health insurance rescinded if they become sick or file “too many” claims. Nor will Medicare exclude coverage based on a pre-existing condition or impose annual or life-time payment caps.

It’s no wonder that Medicare is very popular with the people it serves. In fact, Medicare beneficiaries rate their satisfaction with Medicare much higher than workers with employer-sponsored insurance rate their health care coverage, citing access to providers in particular.[1]

Despite Medicare’s success, however, it faces serious challenges and threats – some real, some imagined, some imposed. The increased role of Medicare private plans during the last decade took a toll on Medicare’s well-being. Private plans were paid approximately 14% more on average than traditional Medicare would have been paid to cover the same services. Fortunately, these overpayments will be gradually turned back, pursuant to the health care reform law, resulting in adding about twelve years to the solvency of the Medicare Trust Fund.

Some policy-makers, however, including the bipartisan National Commission on Fiscal Responsibility and Reform, are focused on reducing the federal deficit by limiting programs such as Medicare.  Others continue to call for turning Medicare into a voucher program, or increasing the age of eligibility, or continuing to income-base benefits  cost-sharing. These approaches threaten the promise of Medicare as a  program providing stable, uniform coverage to all its beneficiaries.

Indeed, Medicare’s future as a public social insurance program with a uniform benefit and cost-sharing system has been whittled away during the last ten years.  Medicare private plans (known as Medicare Advantage plans) were given increased funding and more market-share during the Bush Administration.  In 2003 the Part D prescription drug benefit was initiated only through private plans.   Part B and D cost-sharing mechanisms are increasingly based on the individual’s income.  All this has eroded the single community of interest among all beneficiaries, rich, poor, healthy, or infirm, that has kept Medicare strong. 

So, while celebrating Medicare, we also urge vigilance lest we inadvertently return to the circumstances before Medicare – when so many older and disabled people could not obtain health insurance. Our goal is to keep Medicare’s promise to provide fair access to health care through a stable, unified program. In this way we can help ensure that Medicare’s 45th anniversary will mark its grand maturity, not its mid-life crisis.


Medicare’s 45th Anniversary from President Obama and HHS Secretary Sebelius:; !

[1] Mark Blumenthal, “Who’s Afraid of Public Insurance?” National Journal (June 29, 2009)

July 29, 2010 at 8:30 pm 2 comments

Center for Medicare Advocacy Co-Hosts Tele-Town Hall and Local Event About Health Care Reform and Medicare With President Obama and Secretary Sebelius. Join Us on CSpan at 11am Today!

Here is a comment about today’s health care reform TeleTown Hall from the Medicare beneficiary representing the Center for Medicare Advocacy at the live Town Hall meeting:

My name is Pat Conover. I’m 69 and I have heart disease, high blood pressure, and incurable fast-growing prostate cancer. I have other chronic conditions and special concerns as a transgender person.

I’m doing the wise things to take care of myself and am still productive in several ways. One of the big reasons for my sustained good health is my primary care physician, Dr. Gail Povar. In addition to being a good doctor she is an outstanding advocate and coordinator for my sometimes complex care. She has also had to spend time advocating for me to get the kind of drugs I need, a burdensome task because I am allergic to some of the most prescribed drugs for my condition.

 I am very pleased that health care reform included many positive elements that will recruit, support, and empower more primary care physicians. I believe you and the Congress can build on your success with stage one of health care reform by saving money and improving coordination of care by reducing current programs that try to coordinate care through complex organizations. Transparency and information exchange is valuable, but care coordination is intrinsically a network kind of activity that includes attention to the idiosyncratic aspects of the health care needs of people considered one-at-a-time. You don’t need to pay for a whole football team when the basic game is archery.

 Pat Conover – Silver Spring, MD

June 8, 2010 at 2:24 pm Leave a comment

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