Several deficit reduction proposals have included the combined deductible idea, including ones from President Barack Obama’s National Commission on Fiscal Responsibility and Reform, the Bipartisan Policy Center’s Debt Reduction Task Force, and then-Sen. Joseph I. Lieberman, I-Conn., and Sen. Tom Coburn, R-Okla.
Supporters say a uniform, combined deductible would make things simpler for beneficiaries and help them track all their medical services.
But some beneficiaries could wind up paying more out of pocket, depending on where the deductible is set and what other benefit structure changes come along with it.
The Kaiser Family Foundation ran a model with a single deductible of $550 for services under Parts A and B, a uniform 20 percent coinsurance rate and a $5,500 limit on out-of-pocket spending — the benefit changes most commonly grouped together in the deficit reduction proposals.
Under that model, 71 percent of beneficiaries would have higher out-of-pocket spending, 5 percent would have lower, and the rest would have no or nominal changes. The design also would decrease Medicare spending by $4.2 billion in 2013, while beneficiaries’ aggregate spending would rise by $2.3 billion.
Supporters argue that while beneficiaries might pay more, they would also have less reason to buy supplemental coverage through Medigap plans and would probably get a cap on out-of-pocket spending for the first time.
“We can create reasonable and predictable levels of out-of-pocket expenses without forcing seniors to rely on Medigap plans,” said Cantor, when advocating for the benefit structure change.
G. William Hoagland, senior vice president at the Bipartisan Policy Center and a former top GOP Senate aide, emphasized the importance of the structural changes happening together.
“I don’t think you do this in isolation of other changes within the system,” Hoagland said of making a combined deductible for Parts A and B.
He noted that most proposals that feature a combined deductible also include some kind of catastrophic coverage provision, which Medicare currently lacks. As it stands now, beneficiaries have no limit on their out-of-pocket spending under Medicare.
Rivlin said that getting that catastrophic coverage is one of the main reasons beneficiaries buy Medigap insurance. But when they have Medigap coverage, people generally receive more services than they would otherwise, which raises the cost of Medicare overall, she said.