Medigap policy options could lead to program savings, increased costs for enrollees, report says

Savings estimates range from $1.5 billion to $4.6 billion — depending on the proposal. Policymakers are currently eyeing some of these options to reduce Medicare costs in the ongoing deficit-reduction talks.

Modern Healthcare: Medigap Reform Options Would Mean Higher Costs For Enrollees: Report
A new report from the Kaiser Family Foundation analyzed three potential Medigap-reform scenarios and found that all options could save between $1.5 billion and $4.6 billion in Medicare spending in a single year — and also result in increased out-of-pocket spending for enrollees. In several current deficit-reduction proposals, the report says, policymakers would prohibit Medigap — the private supplemental insurance policies sold to Medicare beneficiaries — from covering all of enrollees' out-of-pocket Medicare costs, which the Kaiser analysis said would expose enrollees to a larger share of Medicare's cost-sharing requirements (Zigmond, 7/20).

CQ HealthBeat: Medigap Changes Would Deliver Savings, Study Says
Medicare could save between $1.5 billion and $4.6 billion in a single year if Congress limited the extent to which supplemental "Medigap" policies could cover out-of-pocket expenses Medicare doesn't cover, according to a new study by the Kaiser Family Foundation. Because Medicare has relatively high deductibles and other out-of-pocket charges, many seniors purchase Medigap policies to pick up those expenses. According to the study, about one in six Medicare beneficiaries in 2008, or seven million total, had Medigap coverage. Some analysts say the policies lead beneficiaries to get medical services they don't need, driving up Medicare spending (7/20).