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Will Medigap Plans Offer Less In Years To Come?

By Wiley Long

Republish: EasyPublish™
Published: 20Mar2012
Word count: 550
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One of the hottest issues before Congress now is a budget proposal made by a congressional "super" committee. In an attempt to reduce the federal budget deficit by at least $1.2 trillion over the next 10 years, there is talk about reducing the coverage available through Medigap plans.

According to the Congressional Budget Office (CBO), this proposal stemmed from studies revealing that Medigap plan holders tend to overuse Medicare service compare to beneficiaries with original Medicare. The term "overuse" is the real issue here.

People with a Medigap plan have coverage for more health care than people with Medicare alone. People are more likely to use services that are paid for by insurance than to buy something they are responsible for paying for most of the time. In this economy, many people can't pay for health care so, of course, people who have coverage through Medigap use more health care. One way to cut federal spending might be to cut back on studying the obvious.

How Many Medigap Plan Holders Are Affected?

About nine million Medicare beneficiaries are supplementing Medicare with a Medigap plan to shield themselves from co-payments, co-insurance and deductibles that are required by Medicare. However, this is where the problem arises.

According to some Washington lawmakers, if consumers are shielded from the real costs of health care, they're more likely to use more and more expensive health care services. This, in turn, drives up the cost of Medicare overall. As a result, lawmakers are considering requiring people with Medigap plans to pay for more of their health care to decrease the federal budget deficit.

The question arises as to which services they intend to cut. It's well known that doctors and hospitals tend to err on the side of not risking lawsuits. Many of us already have end of life directives to prevent being kept alive in a vegetative state that brings us no real meaning. If these are the kinds of health care congress wants to stop, the majority of people would agree.

On the other hand, if congress is talking about discouraging procedures that could give people more years of worthwhile life, then there should be opposition.

Medicare Supplement Insurance Cuts Face Opposition

According to Mary Beth Senkewicz, Florida's deputy insurance commissioner, increasing the cost-sharing for Medigap plan holders would violate state and federal laws that require guaranteed renewable benefits. She added that this would lead to "serious confusion" for those who rely on Medigap insurance to protect them from unanticipated medical costs. By limiting coverage, it could potentially discourage people from getting necessary medical care. In addition, the bipartisan National Association of Insurance Commissioners sent a letter opposing these changes.

The super committee had until November 23, 2011, to finalize a deficit-reduction plan. Congress had a month to study the plan and vote on the super committee deal. In the midst of change, is Medigap coverage more important? In an uncertain economy with uncertainty looming over the future of Medicare, maybe it's worthwhile to cover as much of your medical expenses with insurance as possible. It's going to depend on your individual situation, but if Medigap plan premiums are less than your out-of-pocket medical costs, Medigap would still save you money.

By Wiley Long - President, MedigapAdvisors.com - The nation's leading independent agency specializing in Medicare Supplemental Insurance plans. Run an instant Medicare Supplement Quote to compare plans and save money.

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