MedPAC Pushes for Greater Contributions, Caps to Mixed Review in Senate

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In an effort to curb spiraling healthcare costs, MedPAC, the Medicare Payment Advisory Commission, proposed a pair of new measures to insulate seniors from price increases while asking those who buy supplemental insurance to kick in a little extra.

The recommendations, which came in its latest advisory report, would cap annual out-of-pocket expenses at $5,000 for Medicare beneficiaries. Those who supplement their Medicare A and B coverage with additional insurance would incur an additional 20 percent charge. MedPAC also recommended instituting a $500 deductible for Part A hospital and Part B physician and outpatient services.

“Taken together, these changes would keep aggregate beneficiary financial liability the same,” wrote the agency in a press release accompanying its announcement.

“Currently, beneficiaries who choose supplemental plans to cover cost sharing do not face the real cost of such plans; they pay a premium for the policy, but its price does not reflect the costs of the additional medical services that individuals with supplemental coverage tend to use.

“If beneficiaries preferred to avoid the higher costs of supplemental plans, they could choose either to switch to a different plan or to forgo a supplemental policy—which may be a more viable option once the FFS benefit package is enriched,” the statement reads.

According to political watch blog The Hill, the proposal was met with a less-than-warm reception in committee. U.S. Representative Sam Johnson (R-TX) apparently said the 20 percent fee was tantamount to an added gasoline tax, and could price seniors out of certain procedures.

Across the aisle, U.S. Representative Pete Stark (D-CA) said the supplemental charge was balanced out by the cap, which would safeguard seniors facing expensive procedures.