Cost-shifting, it's the new black. Whether it's
raising the Medicare eligibility age or
making states have to shell out more in Medicaid, policy-makers seem intent on making paper savings for the federal government by increasing costs for individuals, states and the private sector.
According to lobbyists, and that seems to be the only source for information out of the Catfood Commission II, a cost shift to seniors is one of the Medicare changes on the table.
(Reuters) - Medicare supplemental health plans, popular among politically powerful retirees, could come under the budget knife being wielded by the special deficit-reduction panel of Congress, according to sources keeping close watch on its work.
The so-called "Medigap" insurance plans shield the elderly -- many living on fixed incomes -- from costly deductibles and other expenses not covered by the traditional fee-for-service Medicare healthcare program.
"This one is clearly on the table," said a lobbyist who has been following "super committee" deliberations on ways to trim federal budget deficits by at least $1.2 trillion over 10 years.
But super committee Democrats are unlikely to vote to saddle retirees with new out-of-pocket expenses if Republicans refuse to embrace tax increases for the wealthy.
They're using the "skin in the game" narrative again, arguing that seniors will be less prone to go to the doctor if they have to pay more to do so. That's a highly controversial conclusion, relying largely on out-of-date studies that still warn that the results could backfire.
[T]he seminal study advancing the idea that cost-sharing reduces utilization and health spending without impacting care was completed by RAND in 1982. Besides the fact that the data is now almost 30 years old, the RAND study did not include any participants over the age of 61. Yet according to RAND, The Health Insurance Experiment (HIE), (as the study is known) "remains the only long-term, experimental study of cost sharing and its effect on service use, quality of care, and health."[...]
"Reduced use of services resulted primarily from participants deciding not to initiate care. Once patients entered the health care system, cost sharing only modestly affected the intensity or cost of an episode of care." (i.e. once patients were hospitalized or under a physician's care, the choices about the kind of treatments or cost of treatments they received were no longer in their control.)[...]
In conclusion, the RAND summary adds: "The study suggested that cost sharing should be minimal or nonexistent for the poor, especially those with chronic disease."
It turns out that Medicare recipients who buy the most comprehensive Medigap policies often are low-income and in fact, many do suffer from chronic disease. So, although it might be true (as Lieberman suggests), that seniors with "first-dollar" coverage utilize more health care, it's because they are also sicker than the average Medicare beneficiary.
According to a report released in May by the industry group America's Health Insurance Plans, some 33 percent of all Medigap policyholders had annual incomes under $20,000. Nearly 54 percent had annual incomes below $30,000. In rural areas, some 62% of seniors with Medigap policies had incomes below $30,000. [emphasis in orginal]
It's convenient for policy-makers to talk about "shared sacrifice" and it seems like an easy fix to the deficit to just push the costs off on someone else. But it's a false solution, and in this case might offer some short-term savings that would be lost in the long run if it limits access to care for those who need it most and increases health disparity. The tough work of making structural changes to Medicare is what has to be done, for example structuring reimbursement to reward providers more for evidence-based, coordinated care and less for treatments and procedures that are unnecessary or unproven.