Changing medigap supplemental insurance
About one in six people with Medicare buys private supplemental insurance, also known as medigap. It covers some of their out-of-pocket expenses under traditional Medicare, such as the 20 percent copayments typically required for Part B services. This option would limit medigap coverage, requiring people to bear more out-of-pocket costs.
For: People buy medigap to limit their out-of-pocket spending in Medicare. But because they pay less, they tend to use more Medicare services, increasing the burden for taxpayers.
Against: There is no evidence that raising medigap premiums or reducing benefits would deter people from using health services unnecessarily, and most patients can't tell whether a service is necessary or not. But there is evidence that postponing needed services leads to greater health problems that cost Medicare more to fix.
Redesigning copays and deductibles
Currently, Parts A and B in traditional Medicare have different copays and deductibles. Some proposals would combine the programs to have only one deductible — for example, $550 annually, and uniform copays for Part A and Part B services, plus an annual out-of-pocket expense limit, similar to employer insurance plans.
For: Simplifying Medicare benefits to make them less confusing could save Medicare up to $110 billion over 10 years. An out-of-pocket cap would provide great financial protection, especially for sicker beneficiaries, and reduce the need for medigap supplemental insurance.
Against: Some beneficiaries might pay less, but others — especially those who use few services or spend longer periods in the hospital — would pay more out of pocket than they do now, unless they have additional insurance.
Adding copays for some services
Medicare does not charge copays for home health care, the first 20 days in a skilled nursing facility — rehab after surgery, for example — or for laboratory services such as blood work and diagnostic tests. Several proposals would require copays for one or all of these.
For: Added copays would discourage unnecessary use of these services. Over 10 years, copays could save Medicare up to $40 billion for home health, $21 billion for stays in skilled nursing facilities and $16 billion for lab tests.
Against: Patients without supplemental insurance could pay significantly more for these services, or might not be able to afford them. This could end up harming patients and costing Medicare even more money if postponing treatment worsened patients' health, leading to expensive emergency room visits and hospital admissions. Also, patients generally follow doctors' orders and do not know which services are medically necessary and which are not.