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February 2, 1999
The National Bipartisan Commission on the Future of Medicare is due to make its final recommendations on March 1, 1999. The most important questions that consumers will have involve the extent to which the reform proposal will revitalize Medicare so that it better serves beneficiaries' health care needs. The checklist below is a list of questions that are key to whether or not the Commission's proposal or other Medicare reform proposals advance - or set back -- the interests of consumers.
1. Does the reform proposal provide relief for people in need of prescription drugs, including caps on out-of-pocket prescription drug costs?
The failure of Medicare to cover prescription drugs has been one of its most serious weaknesses. Medicare should be reformed so that prescription drugs are in reach of all Medicare beneficiaries. Co-payments should not be so high as to present financial barriers, and coverage should be deep, and should not be limited to first-dollar coverage (e.g., with a $500 cap on prescription drug benefits).
2. Does the reform proposal cap beneficiaries' out-of-pocket costs, providing relief for those with the highest health care costs, i.e., the sickest?
Another serious benefit deficiency of Medicare is its failure to limit beneficiaries' out-of-pocket costs after maximums are reached. While medigap and Medicaid cover gaps for many, millions of moderate income Americans are at risk of devastating out-of-pocket costs. A restructuring of benefits could provide stop-loss protection while eliminating the need for medigap coverage for some.
3. Does the reform proposal establish a framework (even if not fully funded at first) for addressing the growing problem of long-term care?
Nursing home care and home care for the disabled are extremely expensive and can quickly wipe out families' savings and create financial catastrophe for families. Private long-term care insurance will not be a practical solution for most families, who simply can not afford it. Recognition of the growing long-term care problem is the first step in addressing this problem, which will only grow worse over time as the population ages.
4. Does the reform proposal establish a framework, a beginning, for addressing the insurance needs of people who are 55-64, before they are eligible for Medicare, and begin to reduce the ranks of uninsured Americans?
Many people have existing health conditions by the time they reach 55, or develop them by the time they reach eligibility for Medicare at age 65. Ideally, Medicare coverage will be phased in to protect people in this age group (and even younger). If the Commission recommends increasing the age of eligibility for Medicare, there will be a growth the number of uninsured Americans, as well as a missed opportunity for expanding insurance coverage for the near elderly.
5. Does the reform proposal put marketplace competition to work on behalf of consumers, or is marketplace competition likely to bolster profits of companies that don't best serve consumers' needs (e.g., by denying needed care, or avoiding enrolling the sickest consumers)?
Marketplace competition usually offers consumers substantial benefits such as increased choices, lower prices, and higher quality. This can only happen in the health care system if private companies are required to play by the rules established and enforced by the government. Unfortunately, when it comes to health insurance, often competition is among insurance companies who compete for the healthiest consumers and work hard to either deny coverage to the highest risks or charge them high premiums.
6. Does the proposal target relief to moderate income individuals and families - those whose income is too high to qualify for Medicaid yet too low to be able to afford medigap coverage?
It is these families that need the most help. They need protection against catastrophic costs. They need comprehensive prescription drug coverage. They need assistance with the high cost of long-term care.
7. Does the reform proposal tap financing sources that appropriately seek revenues from those people who are able to pay?
Medicare as a social insurance program - a universal program that pools risks broadly - can be preserved while at the same time charging more to those high income beneficiaries who can afford to pay more. (The overwhelming majority of Medicare beneficiaries have moderate incomes, so there is a limit to how much money can be raised from the well-off beneficiaries). It is fair to ask higher income individuals and families to pay more, but this added contribution should not be so onerous as to discourage participation in Medicare.
8. Does the reform proposal assure that Medicare is universal (for the covered age group) to help achieve the highest quality and highest level of political support?
The success of Medicare to date stems largely from the fact that it has been universal. Payments have been sufficient to encourage broad participation by providers. Quality of care has been high. If provider payments were cut too severely, participation and quality would erode. The well-to-do would have a strong incentive to drop out of Medicare. The political support for a program for all seniors and disabled would erode.
9. Does the reform proposal spread risks broadly?
Broad spreading of risks, coupled with universal participation, is the key to keeping average costs down. If the private sector were allowed to select the healthy, without a reduction in their payments, the solvency of the Medicare program would be severely threatened.
10. Does the reform proposal assure that beneficiaries have the freedom to choose their own doctor?
Freedom of choice of doctor allows consumers to exert some control over their health care destiny. This freedom is very important to many consumers, and has been one of the cornerstones of the Medicare program. Many consumers wish to maintain this freedom, even if it means higher costs for them.
1. Does the reform proposal provide relief for people in need of prescription drugs, including caps on out-of-pocket prescription drug costs?
2. Does the reform proposal cap beneficiaries' out-of-pocket costs, providing relief for those with the highest health care costs, i.e., the sickest?
3. Does the reform proposal establish a framework (even if not fully funded at first) for addressing the growing problem of long-term care?
4. Does the reform proposal establish a framework, a beginning, for addressing the insurance needs of people who are 55-64, before they are eligible for Medicare, and begin to reduce the ranks of uninsured Americans?
5. Does the reform proposal but marketplace competition to work on behalf of consumers, or is marketplace competition likely to bolster profits of companies that don't best serve consumers' needs (e.g., by denying needed care, or avoiding enrolling the sickest consumers)?
6. Does the proposal target relief to moderate income individuals and families - those whose income is too high to qualify for Medicaid yet too low to be able to afford medigap coverage?
7. Does the reform proposal tap financing sources that appropriately seek revenues from those people who are able to pay?
8. Does the reform proposal assure that Medicare is universal (for the covered age group) to help achieve the highest quality and highest level of political support?
9. Does the reform proposal spread risks broadly?
10. Does the reform proposal assure that beneficiaries have the freedom to choose their own doctor?
