House Subcommittee Debates Medicare Cost Sharing
Medicare's current cost sharing system for fee-for-service enrollees makes "little sense" for beneficiaries or taxpayers, witnesses told the House Ways and Means Subcommittee on Health yesterday, CongressDaily/AM reports. The committee heard testimony from economists and health care observers, who said the current system fails to control costs while at the same time prices some beneficiaries out of the system. Economist Christopher Hogan testified that Medicare beneficiaries with secondary coverage through former employers or Medigap plans are not made more cost-conscious by copayments or deductibles, raising the program's spending. "Common sense suggests that individuals are more likely to use care if it is free," he said.
But Karen Davis, president of the Commonwealth Fund, said Medicare patients pay more than younger Americans for health care and "can hardly afford to pay more." She added that two-thirds of Medicare beneficiaries are "either sick or poor," meaning that of "all the groups in society, they are perhaps the least able to 'help the market work' by making cost-conscious choices." In addition to addressing the current problems with cost sharing, the committee "challenged" proposed solutions. Subcommittee ranking member Fortney "Pete" Stark (D-Calif.) said that the suggested solution of combining hospital (Part A) and outpatient (Part B) deductibles would have "unintended effects." Noting that 90% of Medicare patients use Part B services while only 18% use Part A services, Stark said, "Any policy that lowers the hospital deductible while raising the Part B deductible reduces expenses for a few at the expense of many." Bill Scanlon of the General Accounting Office said, "The absence of cost-sharing creates no discipline. Adding cost-sharing potentially creates a barrier to care. The challenge is to find a balance between the two" (Rovner, CongressDaily/AM, 5/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.