Insurance Officials Warn Against Premium Hikes for Medigap Coverage
The National Association of Insurance Commissioners, in a letter the group plans to send to HHS, is warning the Obama administration and congressional lawmakers not to raise premiums for supplemental Medicare coverage -- known as Medigap plans -- as a strategy to reduce Medicare spending, Kaiser Health News/Washington Post reports.
The group argues that doing so would backfire and cause higher spending because beneficiaries would stop seeking out necessary medical care when they need it. After nearly 18 months of research and discussions into increased cost-sharing proposals, none of the studies provided evidence that would encourage beneficiaries to seek out appropriate physicians' services, NAIC says.
NAIC's warning comes amid "fiscal cliff" negotiations between lawmakers and the administration on ways to reduce Medicare spending for unnecessary medical treatment. According to the Congressional Budget Office, an increase in Medigap premiums could generate $53 billion in savings over a decade.
Under the Affordable Care Act, NAIC is required to make recommendations to the administration about whether Medicare beneficiaries would be more likely to require fewer services if Medigap plans are "less generous," according KHN/Post.
As of 2010, about 9 million Medicare beneficiaries had signed up for Medigap coverage, and about two thirds of those selected "first-dollar" coverage, which generally pays all beneficiaries' cost-sharing under Medicare.
Last week, a senior issues task force under NAIC approved a draft of the letter, which will be sent to HHS Secretary Kathleen Sebelius after a third task force grants approval, which is expected next week (Jaffe, Kaiser Health News/ Washington Post, 12/6).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.