House Ways and Means Holds Hearing on Medicare Benefit Design
Monday, March 4, 2013
by: VNAA Policy Team

Section: Public Policy and Advocacy

On Tuesday, February 26, the Republican controlled House Ways and Means subcommittee on health, held a hearing entitled: Examining Traditional Medicare’s Benefit Design. The hearing featured panelists Glen Hackbarth, of the Medicare Payment Advisory Commission (MedPAC), Mark Fendrick of the University of Michigan and Trician Neuman of the Kaiser Family Foundation.
Mark Fendrick, of University of Michigan, told the committee that beneficiary copays should be set based on high or low value services and also praised the use of value based payment. Glen Hackbarth, Chair of MedPAC, testified in favor of beneficiary copayments for home health but some members of Congress voiced strong opposition to this and other cost sharing proposals Congressmen Jim McDermott, (D-WA) and Bill Pascrell, (D-NJ). IN 2011 and 2012, MedPAC recommended the addition of a $150 copay for all home health episodes referred from the community.

Here are a few highlights of the testimony presented by Tricia Neuman, of the Kaiser Family Foundation:
Beneficiary Income: More than half of Medicare beneficiaries live on incomes of $22,500 or less. More than one-third of Medicare beneficiaries spent at least 20 percent of their income on medical expenses in 2009. Health expenses accounted for nearly 15 percent of Medicare household budgets in 2010.

Impact of Changes to Medicare Cost Sharing: Simplifying the Medicare design benefit to include things such as cost sharing for the purposes of deficit reduction will likely increase out-of-pocket costs to the majority of beneficiaries, and for some, the increase would be substantial
How the Details Will Impact Patients: The proposal of a unified $550 Part A/B deductible with a 20 percent uniform coinsurance and a $5,500 annual limit on cost sharing for Part A/B services would:

  • Help beneficiaries that exceed the limit on out-of-pocket spending because   of their high inpatient hospital and post-acute care.
  • Harm beneficiaries who do not exceed the out-of-pocket limit and would end up paying substantially more under the new 20 percent coinsurance for home health services and on relatively short inpatient hospital and skilled nursing facility services.
  • Result in 71 percent of beneficiaries in the traditional Medicare program see at least some increase in their out-of-pocket costs, including modest increases in Part B and supplemental insurance premiums.
You can find more information on the hearing and the panelists’ testimony by clicking here.
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