Advisory panel urges new fee on Medigap plans, cap on out-of-pocket costs

The Medicare Payment Advisory Commission made recommendations to Congress for changes to the program. It's not clear if Congress will accept the proposals.

Modern Healthcare: MedPAC Urges New Fee For Medigap Plans
Congress should add a new charge for Medicare beneficiaries who buy supplemental insurance, according to a recommendation from its advisory panel. The size of the fee for Medigap plans was not specified but left up to the secretary of HHS, according to a unanimous recommendation by the panel. Medicare Payment Advisory Commission members and other health policy experts have frequently criticized such plans as cost drivers for Medicare because they often cover all out-of-pocket costs for beneficiaries, which critics contend leads to overutilization of health care services (Daly, 4/5).

CQ HealthBeat: MedPAC Backs Cap On Out-of-Pocket Costs, Fee On Supplemental Insurance
Medicare beneficiaries would be protected from never-ending out-of-pocket costs under a recommendation the Medicare Payment Advisory Commission approved on Thursday. Funding for capping catastrophic expenses would come partly from an additional charge on supplemental insurance plans, such as Medigap policies. Most seniors have some supplemental insurance to pay for medical costs that Medicare doesn't cover (Adams, 4/5).

Meanwhile, a new study finds that Medicare coverage has improved but still doesn't match employer-based plans:

CQ HealthBeat: Medicare Coverage Not As Generous As Large-Employer Plans
Medicare coverage has gotten better in the past few years with the addition of prescription drug coverage, but it's still not as generous on average as the private employer-sponsored insurance offered by large companies or the federal government, according to a new study by the Kaiser Family Foundation. The average value of Medicare is almost as good as the Blue Cross/Blue Shield standard option plan offered to federal workers, with Medicare's benefits worth about 97 percent of the value of the federal plan, the report says. The typical large-employer preferred provider organization (PPO) is better than both. Medicare's coverage equals about 93 percent of the typical big-company PPO benefits (Adams, 4/5).