Changes to Health Coverage Must Include Medicare Improvements

In his national address before a joint session of Congress last night, President Biden outlined his vision for “rebuilding our nation” in the midst of both “crisis” and “opportunity”. His vision included both health care broadly, and Medicare specifically. President Biden stated:

Let’s give Medicare the power to save hundreds of billions of dollars by negotiating lower prices for prescription drugs.

That won’t just help people on Medicare – it will lower prescription drug costs for everyone.

The money we save can go to strengthen the Affordable Care Act – expand Medicare coverage and benefits – without costing taxpayers one additional penny.

Medicare, often viewed as the country’s flagship health coverage program, serves over 62 million older adults and individuals with disabilities. Although the program is rightly beloved, it is incomplete and in need of repair. As the Administration and Congress work to develop proposals to implement the President’s vision, we urge policymakers to keep the Medicare program and beneficiaries central to the discussion.

It’s important to recognize some differences between Affordable Care Act (ACA) coverage and Medicare – and that Medicare beneficiaries cannot enroll in ACA plans. Unlike coverage available through the ACA, traditional Medicare lacks an out-of-pocket cap on health care expenses. Assistance with premiums and cost-sharing is more generous through the ACA than it is in Medicare. The need for dental, vision and hearing services is great among the Medicare population, but the program largely does not cover these critical services. Prescription drug costs are too high both for Medicare beneficiaries and the Medicare program itself. Medicare coverage for nursing home and long-term care is limited. Further, its home health benefit – which can cover aide services for an unlimited duration if someone is both homebound and also requires skilled care – is not actually being provided as authorized by law – and is ripe for reform as part of an expanded approach to home and community-based services.

Medicare’s private option, Medicare Advantage (MA), is not the answer to these problems.  The MA program costs more per beneficiary than traditional Medicare, and such spending is growing faster than previously expected (MedPAC, 2021); Congressional Budget Office, 2020).  Further, despite inflated MA payments, enrollees’ health outcomes are decidedly mixed (New England Journal of Medicine, 2018). While MA plans are required to offer an out-of-pocket cap on Part A and B expenses, a larger percentage of MA enrollees report problems getting care due to costs, or paying medical bills, than beneficiaries in traditional Medicare (even after controlling for income and health status) (Kaiser Family Foundation, 2020). In addition, while many MA plans use rebate dollars to offer some vision, hearing and dental services, the scope of these services are limited.

The Center for Medicare Advocacy has outlined our legislative priorities in our Medicare Platform, which include the following goals:

• Oral health benefit, along with hearing and vision care – in traditional Medicare;
• An out-of-pocket cap on beneficiary expenses in traditional Medicare;
• Improved protections for low-income individuals; and
• Other changes, including expanded Medigap rights and reform of the appeals process.

Medicare needs fundamental, structural changes to ensure quality coverage and benefits that accrue to all of its beneficiaries. The Center supported the approach to improving Medicare outlined in the House-passed Elijah E. Cummings Lower Drug Costs Now Act (H.R.3). H.R.3 would have achieved significant drug savings, in part by allowing the Medicare program to negotiate certain drug prices.  Importantly, it would have reinvested most of those drug savings into the Medicare program by expanding dental, vision and hearing services, expanding low-income assistance, and improving rights to purchase Medigap policies, among other changes.

As Congress grapples with how to improve our health coverage infrastructure, we urge policymakers to keep traditional Medicare, the country’s foundational health program, front and center. As the nation faces an historic opportunity to strengthen and expand health coverage, Medicare must remain central to the discussion. It’s time to build Medicare back, better.