Options to make Medicare more affordable for beneficiaries amid the COVID-19 pandemic and beyond
- Collection:
- Health Policy and Services Research
- Author(s):
- Cubanski, Juliette, author Freed, Meredith, author Neuman, Tricia, author Damico, Anthony, author
- Contributor(s):
- Henry J. Kaiser Family Foundation, issuing body.
- Publication:
- San Francisco, CA : Henry J. Kaiser Family Foundation, December 2020
- Language(s):
- English
- Format:
- Text
- Subject(s):
- COVID-19 Financing, Personal Medicare -- economics United States
- Genre(s):
- Technical Report
- Abstract:
- To date, the federal government has taken several steps to address the health and economic consequences of the COVID-19 pandemic, including sending billions of dollars to hospitals and other providers, providing economic stimulus payments to a majority of Americans, and requiring public and private insurers to provide free coverage of coronavirus testing. But the pandemic has exposed longstanding gaps in the U.S. health care system and brought fresh reminders of the health care affordability challenges facing many people, with and without insurance, including people with Medicare. Medicare provides significant health and financial protections to more than 60 million Americans, but there are gaps in coverage and high cost-sharing requirements that can make health care difficult to afford, particularly for beneficiaries with modest incomes who lack supplemental coverage, such as employer-sponsored retiree health coverage, Medigap, or Medicaid. Beneficiaries are responsible for Medicare's premiums, deductibles and other cost-sharing requirements, unless they have supplemental coverage or have incomes and assets low enough to qualify for the Medicare Savings Programs, which help cover Medicare Part A and Part B out-of-pocket costs, or the Medicare Part D low-income subsidy (LIS) program, which helps with Part D premiums and cost sharing only. Beneficiaries in traditional Medicare with no supplemental coverage are vulnerable to high out-of-pocket expenses because Medicare, unlike marketplace and large employer plans, has no cap on out-of-pocket spending for covered services. But even those with supplemental coverage can face affordability challenges. Although Medicare Advantage plans are required to provide an annual out-of-pocket limit, beneficiaries enrolled in Medicare Advantage plans could still face high out-of-pocket costs, depending on the services they use, the drugs they take, and costs charged by their specific plan. And although beneficiaries with Medigap supplemental coverage have help with cost-sharing requirements for Medicare-covered services and protection against catastrophic expenses, premiums for these policies can be costly. With half of all Medicare beneficiaries living on an income of less than $30,000 per person, these affordability concerns could be compounded for some by the economic recession caused by the COVID-19 pandemic. This report analyzes several policy options that could help make health care more affordable for people covered by Medicare: (1) Add an out-of-pocket limit to Medicare Part A and Part B. (2) Add a hard cap on out-of-pocket drug spending under Medicare Part D. (3) Expand Medicare premium and cost-sharing assistance to low-income Medicare beneficiaries through the Medicare Savings Programs. (4) Expand Part D premium and cost-sharing assistance to low-income Medicare beneficiaries through the Part D Low-Income Subsidy Program. For each of the options, we discuss implications and tradeoffs, including the added cost to the federal government of providing additional protection for beneficiaries. This report focuses on options to improve affordability of current Medicare benefits, rather than options that would expand the benefits Medicare covers, such as adding coverage of dental, vision, or hearing services.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. (More information)
- Extent:
- 1 online resource (1 PDF file (ii, 30 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 9918230987406676 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/9918230987406676