MEDIGAP: Seniors Face More Price Hikes
"[M]illions of senior citizens" are looking at "hefty increases for their Medigap supplemental insurance this year," a trend which may presage a debate over how health resources are allocated in the future. The Los Angeles Times cites as an example United HealthCare Corp., the Medigap provider for the American Association of Retired Persons, which in California is raising Medigap prices an average of 9%, with some plans seeing hikes of up to 19%. "Costs have been relatively flat over the last few years, but they are starting to rise again," said Bob Hussey, United's vice president for retirement and senior services. The Times attributes the change to the quality of health care now available, as well as the extent to which it is delivered -- especially to aging Americans. Americans over 80 are now the fastest-growing age group and are healthier than ever before thanks to breakthroughs in medical science, "but it takes tremendous amounts of money to keep them that way." On average, health care costs $15,000 per year for someone over 80. Furthermore, "[l]ifestyle" treatments such as impotence therapy and knee replacement are now available, further fueling costs.
The Times notes that the "resurgence of medical inflation comes at a difficult political time," with the Bipartisan Commission on the Future of Medicare set to release its recommendations in March. Any solutions which the commission arrives at "could be overwhelmed simply by the reality of demographics" (Rosenblatt, 1/5). Moreover, the rising costs for seniors could result in further political pressure on Congress to mitigate some of its Medicare cost-saving measures enacted in 1997. In today's Wall Street Journal, former Congressional Budget Office Director Robert Reischauer predicts: "For the next few years, the focus in Medicare policy will be on trying to fix the problems caused by the Balanced Budget Act." Brandeis University professor Stuart Altman notes that the lobbying from various industry groups is fierce: "Everyone is lining up at the cash register. It's the sport of the year" (McGinley, 1/5).