Medicare Compliance & Reimbursement

'Medicare Extra' proponents pushing for $250 per-person deductible.

As Medicare beneficiaries and health care consumer organizations become increasingly confused and dissatisfied with the new prescription drug benefit, the Commonwealth Fund wants an all-inclusive option for Medicare enrollees.
 
Offering this "Medicare Extra," or Part E, plan would eliminate the need for benes to purchase a private drug plan and Medigap supplemental coverage--and lessen confusion and dissatisfaction surrounding the new Medicare Part D drug benefit.

In "Medicare Extra: A Comprehensive Benefits Option For Medicare Beneficiaries," a new study published in the Oct. 4 issue of Health Affairs, the Fund proposes allowing traditional fee-for-service Medicare to offer this cost-saving comprehensive benefits option.

The basic rationale for the new proposal is to overcome the negative consequences flowing from the patching together of the Medicare Prescription Drug, Improvement, and Modernization Act's multiple plans. One of the MMA's key stipulations is that benes will only be able to obtain prescription drug coverage through private plans--either stand-alone private drug insurance plans or Medicare Advantage managed care plans.

With the new, separate Part D drug benefit, beneficiaries wishing to remain in the traditional FFS program and still have comprehensive coverage will now need three separate plans: basic Medicare Parts A and B, for hospital and physician services; Part D, a private prescription drug plan; and supplemental private coverage to help cover Medicare's high cost-sharing and protect against catastrophic costs.

The study claims that--in addition to higher administrative expenses due to multiple insurance carriers' involvement in paying for a single individual's health care and a lack of integrated claims administration--the new law has created confusion for Medicare benes. One of Part E's major advantages would be that benes could obtain benefits in a single plan, rather than needing a private drug plan and Medigap in addition to basic Medicare.

"Medicare Extra would create greater simplicity, efficiency and value for beneficiaries and for Medicare," the study's lead author and Fund president Karen Davis said in a statement.

As the report's authors envisioned, Part E's cost-sharing and benefit structure includes a single $250 per-person deductible that would replace the current deductibles for Parts A and B. The proposal reduces Part B coinsurance from 20 percent to 10 percent and eliminates Part A coinsurance for hospitals. Home health and selected preventive care would continue to be exempt from coinsurance. The plan has no deductible for prescription drugs and assesses an average coinsurance of 25 percent with no gaps in coverage.