Not only did they bear the brunt of the financing, but the benefits of the new legislation added little to their existing coverage.”Ĭongress hasn’t substantively touched the issue since then, so the gap in coverage still exists. “Resentment appeared to be highest among people who already had comprehensive health insurance coverage from a former employer. “Many elderly resented the idea of paying additional taxes to finance the new coverage,” researchers wrote in Health Affairs in 1990. There was a maximum tax liability, so no adult would pay more than $800 in extra annual taxes - but for the wealthy and well-insured, it was a step too far, even if it meant some financial protection for the poorest and sickest patients. However, they knew it meant higher taxes for them. Many seniors did not understand what was included in the new law, polling at the time showed. Lawmakers repealed the law less than a year later after facing backlash from the public. Congress passed a law in 1988 to cap Medicare’s deductibles and copays for hospital and physician care. Medicare used to have a cap more than 30 years ago, but it was short-lived. Nearly all commercial health plans have an annual out-of-pocket maximum, meaning the insurance company or employer covers the entire tab for medical care after someone pays the designated maximum amount. “There’s the really intangible feeling of financial security that people get from having an out-of-pocket cap even if they’re not going to reach the cap, and that’s an important thing to not overlook,” said Gretchen Jacobson, vice president of Medicare at the Commonwealth Fund. But Medicare policy experts say there’s momentum to establish that kind of cap for all services, in part to level the playing field with Medicare Advantage, and most importantly, to give millions of seniors and people with disabilities peace of mind if their health takes a turn. A vast majority of Medicare patients also wouldn’t hit that cap - roughly 88% don’t spend $5,000 out of their pockets in a year, according to recent estimates from the Urban Institute. At least 1 in 5 people who choose Medicare Advantage - the alternative to traditional Medicare that is operated by health insurance companies - say they choose it because of the out-of-pocket limits that insurers offer, according to a new survey from the Commonwealth Fund.Īdding an out-of-pocket maximum to the main Medicare program would cost taxpayers money, like it will for drug costs. The issue is especially relevant as Medicare’s annual enrollment is underway, ending Dec. “People don’t realize it until they enroll in Medicare.” “Many people don’t know that traditional Medicare does not have a cap on catastrophic out-of-pocket expenses, because most insurance does,” said Cristina Boccuti, director of health policy at research firm West Health. But there’s no such limit for hospital or doctor billsīy 2025, people on Medicare who take expensive medications will feel significant financial relief: They will not have to pay more than $2,000 in a year for all of their drugs.īut the 35 million people who are enrolled in the traditional Medicare program still won’t have that same relief anytime soon for their hospital, outpatient, home health, and nursing home care, leaving them exposed to potentially unlimited costs if they become seriously ill and don’t have supplemental coverage. Medicare is going to cap patients’ spending on drugs. Gary and Mary West Emergency Department at UC San Diego Health Learn More.Gary and Mary West Senior Dental Center Learn More.Gary and Mary West Senior Wellness Center Learn More.Expanding PACE – Programs of All-Inclusive Care for the Elderly.Accelerate Adoption of Value-Based Care.Lowering Healthcare Costs & Addressing High Costs of Prescription Drugs.
Geriatric Emergency Department Collaborative.Gary and Mary West Emergency Department.Policy Research and Education Learn More.We are dedicated to lowering healthcare costs to enable seniors to successfully age in place with access to high-quality, affordable health and support services that preserve and protect their dignity, quality of life and independence. Lowering the Cost of Healthcare and Successful Aging.
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