A burning issues before the Congress is a budget proposal sponsored by a congressional “super” committee. There is talk about reducing the coverage available through Medigap plans, in an attempt to reduce the federal budget deficit by at least $1.2 trillion over the next 10 years.
According to the Congressional Budget Office (CBO), this proposal arose from studies which reveal that Medigap plan holders tend to overuse Medicare service as opposed to beneficiaries with original Medicare. The real issue here the term “overuse.”
People with a Medigap plan have coverage for more health care than people with Medicare alone. People are more inclined to use services paid for by insurance than to buy a plan they are responsible for paying for most of the time. In this economy, many people can’t pay for health care so, of course, people who have coverage through Medigap use more health care. One way to cut federal spending might be to cut back on studying the obvious.
How Many Medigap Plan Holders Are Affected?
About 9 million Medicare beneficiaries are supplementing Medicare with a Medigap plan to protect themselves from co payments, co insurance and deductibles that are required by Medicare. However, this is where the problem arises.
According to some Washington lawmakers, if consumers are shielded from the real costs of health care, they are more likely to use more expensive health care services. As a result, this drives up the overall cost of Medicare. As a result, lawmakers are considering requiring people with Medigap plans to pay for more of their health care to reduce the federal budget deficit.
The question arises as to which services they will cut down. It is well known that hospitals and doctors tend to err on the side of not risking lawsuits. Most individuals already have end of life directives to prevent being kept alive in a vegetative state that has no real meaning. If these are the kinds of health care which congress wants to put an end to, many people will agree to it.
On the other hand, there should be opposition if US congress is debating about discouraging procedures which could give people more years of worthwhile life.
According Florida’s deputy insurance commissioner, Mary Beth Senkewicz, increasing the cost-sharing for Medigap plan holders would be a violation of state and federal laws that require guaranteed renewable benefits. She added that this would lead to “severe confusion” for those who rely on Medigap insurance to protect them from medical costs unanticipated.
Potentially, limiting coverage could discourage people from getting necessary medical care. In addition, the bipartisan National Association of Insurance Commissioners wrote a letter to oppose these changes.
The super committee had until November 23, 2011, to finalize a deficit-reduction plan. The congress had a month to study the plan and vote on the super committee deal. In the midst of change, is Medigap coverage more important? In an uncertain economy with uncertainty looming over the future of Medicare, it may be worthwhile to cover as much of your medical expenses with insurance as possible.