America's Benefit Specialist April 2023

MEDICARE MATTERS

certified addiction counselors, and evidence-based digital applications and platforms that facilitate delivery of mental health services, while removing unnecessary limitations on beneficiary access to psychiatric hospitals. CRFB WELCOMES PLAN TO PUT MEDICARE SOLVENCY ON THE TABLE In response to President Biden’s proposed budget, the Com mittee for a Responsible Federal Budget released this statement: Today, President Biden previewed a new plan to improve the solvency of the Medicare Hospital Insurance trust fund. The plan would increase the top rate of the HI payroll tax and net investment income tax (NIIT) from 3.8% to five percent, expand the NIIT to apply to more types of income, and ex pand the prescription drug pricing reforms enacted under the Inflation Reduction Act. The plan would transfer the new prescription drug savings into the Medicare HI trust fund and would also redirect existing NIIT revenue from the general fund to the HI trust fund. We strongly support the administration’s efforts to strengthen the Medicare trust fund. The HI trust fund is only five years from insolvency, and we are pleased that the Medicare beneficiaries must weigh several trade-offs when deciding among their coverage options, whether they choose a private Medicare Advantage plan or traditional Medicare with supplemental coverage. For example, MA plans typically provide benefits not in cluded in traditional Medicare, such as eyeglass coverage, as well as a limit on out-of-pocket expenses for medical services. Traditional Medicare, on the other hand, allows beneficiaries to go to any doctor, hospital, or other provider that accepts Medicare, without the need for prior approval. For help in making these decisions, nearly one-third of beneficiaries age 65 and older said they turn to an insurance broker or agent. Given the wide use of brokers and agents and the potential impact of their guidance on beneficiaries’ coverage choices, the Commonwealth Fund partnered with the public opinion research firm PerryUndem to learn their perspectives on the state of coverage choices, the challenges their clients face in choosing an option, and the ways in which their financial incentives align or conflict with beneficiaries’ interests. In September 2022, PerryUndem held four focus groups with more than two dozen brokers and agents who sell Medicare Advantage plans, Medigap supplemental coverage

president has put forward a plan to extend the life of this vital program. Anyone who opposes the measures he suggests to lower prescription drug costs and raise new revenue should put forward their own ideas to address Medicare’s rising costs and looming insolvency. We do have reservations, however. It would be better for the plan to keep the drug savings in Medicare Part D, where costs remain too high and are rising too quickly. Far more concerning, the administration’s plan to redirect the NIIT rev enue amounts to a large general revenue transfer that would strengthen Medicare on paper without truly improving its financing. Absent offsetting measures, this part of their plan simply robs Peter to pay Paul and, in the process, would worsen the budget outlook outside of the trust fund. Even without diverting general funds, the president’s plan would generate hundreds of billions of dollars—perhaps even approaching a trillion dollars—to strengthen Medicare. We welcome these proposals and hope others put forward addi tional ideas to reduce Medicare Part A costs, lower healthcare costs more generally, rein in excessive payments to providers and insurers, improve incentives for high-value care, and generate adequate funding to support these important programs. plans and Part D prescription drug plans. The participants were diverse with respect to age, gender, race and ethnicity, the states in which they operated, and the number of years they had been selling Medicare private plans. Here are the key themes and findings from the discussions: In general, most brokers and agents in the focus groups recalled receiving higher commissions—sometimes much higher—for enrolling people in Medicare Advantage plans compared to Medigap supplemental plans for traditional Medicare, with some variation by geographic region and new enrollments versus renewals. Brokers and agents said they tend to sell the combination of traditional Medicare with a Medigap policy to beneficiaries with higher incomes, and Medicare Advantage plans to those with lower incomes. Most brokers and agents said they personally would choose traditional Medicare with Medigap, believing that combination offers better coverage and choices than Medi care Advantage, particularly as people age. For the complete details of the study, go to www.common wealthfund.org.

THE CHALLENGES OF CHOOSING MEDICARE COVERAGE: VIEWS FROM INSURANCE BROKERS AND AGENTS

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