In recent months, the discussion on “saving” Medicare has centered, at least in part, around reforming Medigap insurance. There have been a wide variety of proposals put forth, including eliminating first-dollar coverage and many other similar revisions.
The most recent proposal that has been volleyed around is the February 2012 proposal by the Obama administration to raise 2.5 billion over the next 10 years by implementing a surcharge to Medicare enrollees who purchase Medicare Supplements. This would not affect those already on Medicare or those very close to getting benefits, only those more than a few years from turning 65.
Most analysts say that the surcharge would amount to approximately 15% on top of the premiums of the plans.
The reason for this proposed surcharge is, just like other proposals, to provide further “pain” to using first-dollar coverage, which many legislators see as one of the problems with Medicare. Medicare eligible individuals, they say, have no “skin in the game” because first-dollar coverage encourage seniors to use their insurance often, and when doing so, they don’t have co-pays, deductibles, etc.
This proposal is set to go into the budget proposal in 2013, and if it’s passed, it would take effect in 2017.
Our opinion is that this is, obviously, not a good thing for people on Medicare in coming years or for the long-term viability of Medicare. There are many other things that can be “fixed” with the Federal Medicare program. We, like most people, believe that allowing people to pay for as much or as little coverage as they want is a good thing. Some people will opt for the “full” coverage and some will not – that freedom of choice is the ultimate goal.
If you have questions about this proposal or how it relates to you – or if you just want to get more information on Medigap plans – call us at 877.506.3378 or visit us at Medicare-Supplement.US.