America's Benefit Specialist May 2023

MEDICARE MATTERS

UNDERSTANDING THE VALUE AND BENEFIT OF MEDICARE SUPPLEMENT COVERAGE

Senators Bill Cassidy (R-LA) and Jeff Merkley (D OR) recently introduced a bill to improve the way Medicare Advantage plans assess patients’ health risks and reduce overpayments for care. The No Unreasonable Payments, Coding, or Diagnoses for the Elderly (No UPCODE) Act will save taxpayers billions by eliminating incentives to overcharge Medicare for care. “Medicare is going insolvent in four years. The challenge is preserving that which is good while squeezing out waste,” said Dr. Cassidy. “This bill is a step in that direction.” “Federal audits have found that taxpayers have been overpaying bad actors running Medicare Advantage plans by billions of dollars every year, threatening the stability of both Medicare Ad vantage and traditional Medicare,” said Senator Merkley. “This fraud has to end.” Traditional Medicare plans reimburse providers for the cost of treatments rendered, while Medi care Advantage is paid a standard rate based on the health of an individual patient. Because of this, Medicare Advantage plans have a financial incen tive to make beneficiaries appear sicker than they may be to receive a higher Medicare reimburse ment. The No UPCODE Act would eliminate those incentives by: • developing a risk-adjustment model that uses two years of diagnostic data instead of just one year • limiting the ability to use old or unrelated medi cal conditions to inflate the cost of care • ensuring Medicare is only charged for treatment related to relevant medical conditions • closing the gap between how a patient is as sessed under traditional Medicare and Medicare Advantage. SENATORS INTRODUCE BILL TO BETTER ASSESS MEDICARE PATIENT HEALTH, AVOID OVERPAYMENTS

Every American deserves access to affordable, high-quality health coverage that protects their health and financial sta bility. Health insurance providers are delivering for seniors by providing affordable choices among Medicare Supplement (also known as Medigap) plans. A new AHIP report examines trends in Medicare Supplement insurance and highlights the benefits and financial peace of mind these plans bring to seniors and people with disabilities. More than half (54%) of all original Medicare enrollees without any additional cover age chose a Medicare Supplement plan in 2020. And those enrollees were three times less likely to have problems paying medical bills than those with just original Medicare. “Medicare Supplement coverage protects the health and financial well-being of over 14 million seniors,” said Jeanette Thornton, AHIP executive vice president, policy and strategy. “It’s an important resource that protects Americans from high out-of-pocket costs not covered by original Medicare, helps them budget for medical expenses, and simplifies their bill paying.” The new report describes the various types of Medicare Supplement plans, demographics of who chooses to enroll in these plans, which are the fastest growing plans, and how enrollment breaks down state by state. Key takeaways from the report: • The percentage of original Medicare enrollees purchasing Medicare Supplement coverage grew from 35% to 41% between December 2017 and December 2021. • More than half (54%) of all original Medicare enrollees with out any additional coverage chose a Medicare Supplement plan in 2020. • Medicare enrollees with Medicare Supplement cover age were three times less likely to have problems paying medical bills compared to enrollees without Medicare Supplement policies. Only three percent of enrollees with Medicare Supplement coverage reported having difficulty paying medical bills in the last 12 months, compared to eight percent of original Medicare enrollees without Medi care Supplement coverage. • A majority of Medicare Supplement (57%) are women, while 42% are 75 years old or older. • A significant percentage of Medicare Supplement enroll ees are people with lower incomes. For example, 11% have annual household incomes below $20,000, and 24% have incomes below $30,000.

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