Researchers argue combined Medicare coverage would save big

By BenefitsPro

By Kathryn Mayer

Combining Medicare coverage with commonly purchased private supplemental coverage into one health plan could save $180 billion over a decade, according to new research.

Researchers at The Johns Hopkins Bloomberg School of Public Health and The Commonwealth Fund proposed a new benefits options called “Medicare Essential,” which would bundle hospital, physician, prescription drug and supplemental health coverage into one, all-encompassing health plan.

Under the proposed plan, the researchers say Medicare beneficiaries could save a total of $63 billion between 2014 and 2023, with total premium and out-of-pocket costs for beneficiaries estimated to be 17 percent to 40 percent lower than current costs.

“This plan builds on traditional Medicare, which beneficiaries are more satisfied with, than private coverage,” said Karen Davis with The Bloomberg School of Public Health, an author of the study.

“But Medicare is overly complex, and it fails to protect beneficiaries against high costs unless they buy supplemental coverage. Medicare Essential would simplify and modernize Medicare for beneficiaries and help keep premiums and out-of-pocket costs reasonable.”

Currently, many Medicare beneficiaries purchase supplemental plans — Medigap for copays and deductibles and Medicare Part D for prescription drugs — to guard themselves against high out-of-pocket costs.

Both political parties have brought up the idea of combining Medicare programs in a stab at slashing government spending, though some advocates have warned a uniformed Medicare program will raise premiums for most seniors.

Researchers also said private employers enrolled in retiree plans could save an estimated $90 billion, while savings for state and local governments are projected to be $27 billion over 10 years. The savings would come from simplifying administrative costs and rewarding the delivery of high-quality, high-value care.

Under Medicare Essential, beneficiaries would spend an average $354 per month on health care costs, compared with a projected $427 in 2014 under the status quo.

Those enrolled in Medicare Essential who use high-value providers would spend an estimated $254 a month, for a savings of 40 percent.

The study was published Monday in the journal Health Affairs.

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