Is the Obama administration getting ready to increase costs for medicare beneficiaries?

In the New York Times, anonymous sources representing the White House offered the following trial-balloons:


We have seen these recommendations before in 2011, but with more description of why these changes were considered.

1.     Increasing Cost-sharing for home health care. In September of 2011, Obama had offered to make changes to cost-sharing:

“Starting in 2017, Mr. Obama would require certain new beneficiaries to pay co-payments for home health care, which is now exempt from such charges. The co-payment would be $100 per episode, defined as a series of five or more home health visits not preceded by a stay in a hospital or a skilled nursing home.”

2.     Increasing Deductibles for Part B Medicare services. From an article in the NYTs Sept. 19th, 2011:


3.     A fifteen per cent surcharge on Medigap plans. In the article from the NYTs (Sept. 19th, 2011) Obama offered the following explanation for this increase in cost:

In addition, the White House would increase Medicare premiums by about 30 percent for new beneficiaries who buy generous private insurance to help fill gaps in Medicare. Many beneficiaries choose these private Medigap policies because they want the financial security they get from the extra insurance. But the White House said this protection “gives individuals less incentive to consider the costs of health care and thus raises Medicare costs.”

4.     Waiting until 2016 to implement the changes. Both in 2011 and now in 2013, delay until 2016 or later was recommended.

5.     Both documents demonstrate an opinion that medical care is overused.  In the latest article, seniors on Medigap insurance were described as insensitive to cost of care. In the 2011 article, seniors having Medigap insurance were described as having less incentive to consider the costs of healthcare and as being the cause of rising Medicare costs. No mention of the rising cost of healthcare, hospital services, inflation. No mention was made of the failure to regulate and make medical prices conform reasonably in relation to their actual costs. Doctors prescribe tests, not patients!

At least the current trial balloon did not include all of the other cuts to Medicare related services which describe the current Senior Protection Plan produced by Center for American Progress. Apparently this administration is determined to shrink Medicare by making it so expensive that patients will not desire to use it.

6.     Here is one new recommendation which was not in the news in 2011: Unidentified participants in meetings with President Obama, claim that he also endorsed a merger of deductibles for part A and part B:


Since it is difficult to know whether or not this latter merger of deductibles was part of the deliberate leak prior to the presentation of the budget in April, it is probably only worth saying that this will definitely increase costs for those whose primary need are doctors visits (paid for in Part B). This is consistent with the entire group of ‘reforms’ which seem focused on shifting the burden of paying for Medicare services onto beneficiaries. Here are the current deductibles:


Photo by Alex E. Proimos released under a Creative Commons license.