The future of Medicare: A surcharge if you buy Medigap coverage

People who buy a Medicare supplement to fill the gaps in Medicare (also known as Medigap insurance) go to the doctor too much. Therefore, people who buy Medigap insurance should pay a surcharge to Medicare because they are going to use the health care system too much. That is the conclusion President Obama and his advisers have reached as they seek out ways to reduce Medicare costs and cut government spending. Here is a letter I’m sending to the President.

Dear President Obama:

As an insurance broker working with Medicare-related products, I think your plan to impose a surcharge on seniors who purchase Medicare supplements is a bad idea. You seem to think everyone who buys Medigap insurance has lots of money, and you seem to think most seniors can afford to pay more of their health care costs.

Just yesterday, I met a woman who lives in a double-wide trailer in Tucson, Arizona and is thrilled to be turning 65 so she will once again have health insurance. Laura (not her real name) has numerous health issues that have received limited treatment because she has been without health insurance since she took early retirement from a large, well-known company. Once Laura gets her Medicare coverage, she will get an operation she needs on her thyroid. Then she will address a long list of other medical issues .

Laura makes too much money to qualify for help with her Medicare costs or Part D drug coverage because she has Social Security and a small pension that totals $1,600 per month.  The cost of a Medicare supplement plus a Part D plan premium each month will severely strain her budget, but the co-pays that come with a Medicare Advantage plan could add up to thousands of dollars each year.  Fortunately for Laura, she has a daughter who wants her to get a Medicare supplement and will help with the premiums – even though the daughter doesn’t have a lot of money herself.

Laura’s daughter wants her mother to get a Medigap plan so she won’t have to worry about whether or not she can afford to see a specialist, get the operation she needs, or get physical therapy for her bad knees.  Laura’s daughter has seen her mother suffer with health issues and put off care because she has not had insurance – and she wants that to stop.

Mr. President, I think you are listening to advisers who have no clue about people on Medicare and how many struggle to pay their Medicare supplement premiums or the co-pays that come with Medicare Advantage plans.

In looking over my Medicare supplement client list I see mainly lower-middle class seniors who are conservative about their planning for the future. Most of them are not sickly – they are just planners who have chosen to get the best coverage possible for their future needs. I also have clients like Laura who have serious health problems –  and serious concerns that they will be refused medical treatment in the future because they can’t afford the co-insurance.

What kind of country treats its seniors this way? And how do you calculate how much money each senior can afford to pay – or should pay – for their medical care? If seniors are getting too many tests and too many knee replacements, whose fault is that?  Seniors don’t decide to seek tests and treatment on their own – they listen to their doctors!

Mr. President, the idea of pushing more costs onto seniors is called “consumer-driven heath care”. This is a system where more and more costs are pushed onto patients – so they get to “ration” their own care.  I worked for a large insurance company and this was their mantra. I don’t know if you realize it, but your policies are right out of the insurance industry book – and will push more people into Medicare Advantage plans (which you have campaigned against).

There are other ways to control the Medicare budget without forcing seniors to ration their care based on ability to pay. I ask again, “What kind of country treats its seniors this way?”

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2 Responses to "The future of Medicare: A surcharge if you buy Medigap coverage"

  1. I have similar stories to tell about some of my client who can’t afford health insurance before 65. If the current administration has there way, health insurance for those 65+ will be denied to many. Other horror stories I hear now are clients being “assembly lined” for their 15 minute doctor visits, doctors who increasingly are not accepting new Medicare patients, and this is before the proposed cuts to providers has taken effect. Just think how it will be when doctors are informed that to balance the government’s debt budget, they will be getting less for their Medicare patients. I hope we can find another way to get our country back on track for health care.

  2. medicareblogger says:

    Thanks for reading my blog. You should read more of my posts so you will not fall prey to false stories about doctors dropping out of Medicare and doctor fees being cut.

    I recently reported on a study that found that over 90% of doctors who accept Medicare are taking new patients. Another independent study found that 92.9% of all doctors accept Medicare patients. You can find that post here.

    I have also written about how primary doctors are getting a 10% increase in their Medicare payments as a result of the Affordable Care Act. 

    If a doctor is giving patients only 15 minutes of his time, that has nothing to do with Medicare or health care reform. It might have something to do with his contract with private insurers and Medicare Advantage plans – or his desire to increase his income by seeing as many patients as possible per day.

    My concern about the future of Medicare is that it will become more like the under-65 market where more and more costs are pushed onto patients to save money for insurance companies – and boost profits.  There seems to be plenty of room to cut costs in Medicare without putting the burden on seniors.

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