Among other things, that bill would radically change Medicare for its nearly 50 million beneficiaries. It’s important to note that Corker’s proposal will not cap Medicare spending on care—that’s one solution that’s been floating around. Instead, Corker’s plan would allow seniors and disabled people to get all the treatments they wanted—as long as they could pay for them. And it’s how they would pay for them that Corker would like to change. In a nutshell, they’d pay more.
The changes are complicated, but as we explained earlier this year, they would make seniors pay more out of pocket for their care. More skin in the game, which, the theory goes, would tend to lower healthcare expenditures because seniors would not over-use medical services. Another way to think of this change, though, is as a cost shift—from money out of the government’s purse to money out of beneficiaries’ wallets instead. And it raises a big question: Will seniors purchase the medical care they need, or postpone it to save money, possibly at a cost to both their health and, ultimately, to the healthcare system.
Corker’s bill would set up one deductible that covers hospital and medical services instead of separate deductibles for these services, which is currently the case. Right now, Medigap policies—which most seniors carry to protect themselves from large out-of-pocket expenses that Medicare doesn’t pay for—cover these separate deductibles, as well as coinsurance Medicare requires them to pay for medical services. (Coinsurance is not well understood. It is based on a percentage of what Medicare pays and is different from a copayment, which is a set dollar amount that you know in advance.)
Corker’s bill prohibits insurance carriers from covering the new deductible and a good chunk of the coinsurance. As we pointed out in that earlier piece, a senior or disabled person would have to pay the first $550 of their medical expenses (the deductible amount), $2,250 of their coinsurance, plus the premiums for both their Medigap policy—as well as the premiums for the parts of Medicare itself that cover medical services and drugs. In the February post, I wrote: “A couple without a Medigap policy would pay all of those out-of-pocket costs—$15,000. That could be quite tough for many seniors especially those whose only income is from Social Security.” In future years, Corker would like to prohibit seniors from buying Medigap insurance altogether. The hope is they won’t go to the doctor as often or use as many medical services, and the national medical bill will drop.
Wallace did not discuss any of this, but at the end of the interview he wanted to know how quickly the Dems and the GOP might strike a deal. “You know I am getting a kind of hopeful sense from both of you.” Thus Corker got another crack at his talking points:
When he [the president] begins to lay that out from his podium—I have been saying that for years, and Dick Durbin has been saying it for some time—but when the president uses the bully pulpit to explain to the American people the families are only paying 1/3 of the cost of Medicare, we will know that that we have begun the process of trying to solve this problem.
That one-third number again! Because Durbin and Corker have signaled the skin-in-the-game approach will be on the table, in a future post I will untangle the one-third figure that Corker seems so fond of using.
The Second Opinion, CJR’s healthcare desk, is part of our United States Project on the coverage of politics and policy. Follow @USProjectCJR for more posts from this author and the rest of the United States Project team. And follow Trudy Lieberman @Trudy_Lieberman.