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Lawmakers push back on proposed insurance charge for seniors
Members of a House subcommittee on health issues pushed back against a recommendation that seniors who buy insurance to supplement their Medicare coverage pay a special fee.
Congressional advisers said in a report Friday that the roughly 90 percent of Medicare beneficiaries who buy supplemental insurance should pay a 20 percent charge because they impose additional costs on Medicare.
The chairman of the Medicare Payment Advisory Commission (MedPAC), which made the recommendation, defended the idea in a hearing Tuesday.
"The private decision" to buy supplemental insurance "increases costs to the Medicare program and the taxpayers," he said.
"We think it is appropriate ... [for those beneficiaries] to face at least a portion of the additional cost" in order to help curb Medicare's growing budget, he said.
The idea is that supplemental insurance shields Medicare beneficiaries from knowing the real cost of many medical procedures, which could lead them to seek treatments that are not medically necessary. Those choices, Hackbarth argued, drive up the cost of the Medicare program as a whole.
"We think that when you take into account all of the different facts, that imposing the supplemental charge will result in lower costs for the Medicare program," he said.
Republicans have supported similar proposals in the past. But Rep. Sam Johnson (R-Texas) wasn't buying it on Tuesday.
"I don't understand that. I think it's wrong," he said, comparing the proposed charge to an extra fee for buying gasoline.
Hackbarth responded that "the purchase of gasoline does not increase the cost to the taxpayer."
Johnson also wondered whether the fee would lead seniors to forgo important care — a concern echoed later by Rep. Dave Reichert (R-Wash.).
Hackbarth later emphasized that the 20 percent charge could only function as part of a larger redesign of Medicare benefits.
MedPAC's report stated that the charge would not raise costs for Medicare beneficiaries because it would be implemented with a cap on out-of-pocket expenses and other cost-saving reforms.
The subcommittee's ranking member, Rep. Pete Stark (D-Calif.), praised the proposed out-of-pocket-expenses cap, saying it would help protect seniors who face catastrophic and costly illnesses.
He added that imposing the supplemental insurance charge without creating the cap would be a bad thing.
