House Subcommittee Discusses Possibility of Medigap Reform
During a hearing yesterday, the House Ways and Means Subcommittee on Health discussed Medigap, which supplements Medicare coverage, but was unable to reach on consensus on how to reform the program, CongressDaily/AM reports. Rep. Nancy Johnson (R-Conn.) said that reform is needed now because statutory requirements for Medigap coverage froze benefits and do not allow plans to adopt cost-saving measures such as drug formularies and disease management programs (Rovner, CongressDaily/AM, 5/2). Johnson said she is concerned with Medigap's emphasis on "first-dollar coverage" because Medigap plans generally pay all beneficiaries' cost-sharing under Medicare and thus can cause beneficiaries to overuse medical care "because it seems free." The overuse then drives up the program costs for the government, which drives up premiums for beneficiaries because the premiums are based on program spending, she said (Rovner, Reuters Health, 5/1). Richard White of Anthem, testifying on behalf of the Blue Cross and Blue Shield Association -- which offers the most Medigap plans in the nation -- agreed with Johnson that the statutory requirements freeze benefits, but he said that Medigap plans do not cause beneficiaries to overuse medical care, CongressDaily/AM reports. "We believe consumers should have the ability to choose what they want, and right now, consumers are choosing first dollar coverage," White said. Tricia Neuman, a Kaiser Family Foundation vice president, said that increasing beneficiaries' cost-sharing could decrease the incidence of beneficiaries receiving unnecessary medical care but also could deter people from getting needed care. She added, "If people end up in the emergency room because they've gone without needed care, (Medicare) spending could actually rise" (CongressDaily/AM, 5/2). "The only choice most Medicare beneficiaries make is to see a primary care doctor. People don't just go and get tests. We do what our primary care doctors tell us to," Rep. Pete Stark (D-Calif.) said, adding, "So if in fact there is a lot of overutilization, it is the physicians and other health care providers who cause it" (Reuters Health, 5/1).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.