Insurance Matters
Medigap added to Medicare means more spending:
[E]mployer-sponsored and self-purchased supplemental coverage were associated with annual spending growth rates of 7.17 percent and 7.18 percent, respectively, compared to 6.08 percent for beneficiaries without supplemental coverage. In the first empirical study of the topic, the researchers found significantly higher rates of spending growth in all supplemental insurance categories compared to the category without supplemental insurance, even while controlling for sociodemographic, disease, disability, and health behavior characteristics. Golberstein and his colleagues suggest that policy efforts to restrict the generosity of Medicare supplemental insurance plans, and the anticipated lower levels and lower generosity of employer-sponsored supplemental Medicare coverage for future retirees, could slow the rate of spending growth for Medicare beneficiaries. (Health Affairs)
It always irritates me that this sort of bogus research (probably funded by taxpayers) is placed behind a pay wall where just normal people on Medicare cannot see what these academic bigots are saying.
Not being able to read the research cited, I would ask someone that has how the researchers could compare the 97% of us that supplement Medicare in some way with the 3% that don’t.
And what could that comparison possibly show since the 3% that don’t must be made up of very rich people who couldn’t care about health care insurance because they effectively self insure and some very small group (as a percentage) or seniors and disabled people that have fallen through the cracks even though CMS has trained over 25,000 volunteers across the United States to educate seniors about the need for supplemental insurance and to assist people in signing up for it.
There’s a lot of talk about the nation’s “fiscal” health. I, as an independent thinker, will never accept the notion that a society that uses currency from thin air is “worried” about it’s made up fiscal issues while people are physically dying from inadequate care. For example, people dying in emergency rooms because they weren’t treated due to their uninsured status. These things actually happen and only show how uncivilized we still are as a conscientious species. So, I’m more worried about our own health than our societies “fiscal” health, or whatever that means.
Research showing seniors with MediGap policies spend more without improving health go back years. It’s a little naïve, though, to assume restricting these plans will cut spending. The policy question is: do these plans encourage higher spending; or do people anticipating higher spending buy these plans.
I think it is evident that most people would buy these plans as they anticipate or fear higher spending due to illness or fear of illness due to family background.
To be frank, the insight produced by this research isn’t really all that surprising, but it would be interesting to see by exactly how much we bring down the cost of health care.
Interesting Post. It would be interesting to know exactly how much it would decrease spending. The U.S. taxpayer needs any break he can get with Obamacare coming into full effect.
“Supplemental coverage makes health care more affordable for beneficiaries but also makes beneficiaries insensitive to the cost of their care, thereby increasing the demand for care.”
If you subsidies something you get more of it. Medicare subsidies create an entitlement mentality, and if there is any way we can decrease spending, the USFG should implement it as soon as possible.
I object to the idea that the government should limit the ability of an individual to purchase insurance in the name of “national fiscal health”
This kind of command and control management over our health care is going to make our nation hot mess.
Has there been any example of health care systems governed by free market forces in any OECD countries. I will be interested to see. It almost seems like we are never going to have a free market place when it comes to health care.