Low-income seniors who do not have supplemental coverage or Medicare Advantage could face out-of-pocket healthcare spending.
More than six million seniors would face COVID-19 treatment out-of-pocket healthcare spending if diagnosed with the coronavirus, a Patient Assistance Network (PAN) Foundation issue recent brief.
Traditional Medicare and Medicare Advantage cover nearly all of the same coronavirus-related services, including testing, in-person office visits, and telehealth visits. Traditional Medicare and Medicare Advantage will also cover the vaccine when it comes out.
But coverage does not mean that patients are free from out-of-pocket healthcare spending. For Medicare Advantage, out-of-pocket costs largely depend on private payer policies. For those with traditional Medicare, supplemental coverage would be required to cover treatment costs.
For traditional Medicare beneficiaries, testing and the future vaccine have no attached cost-sharing, but any treatment after a positive diagnosis—from telehealth visits to hospital admissions—could result in out-of-pocket costs. This includes medication that is not a vaccine, PAN Foundation added, such as anti-viral and pneumonia medications which are currently being used to treat coronavirus.
Most beneficiaries on traditional Medicare do have supplemental insurance to cover some other out-of-pocket costs related to coronavirus treatment, whether through Medicaid, Medigap, or an employer-sponsored health plan.
In the past several years, however, employers started dropping their supplemental plans, pushing seniors toward Medicaid or Medicare Advantage plans to fill gaps in coverage. In particular, middle and low income workers saw their Medicare plans stripped of supplemental benefits.
When those who turn to Medicaid and Medicare Advantage are removed from the equation, six million Americans on traditional Medicare are left behind who do not have supplemental coverage. These seniors could be exposed to higher out-of-pocket healthcare spending if they have to face coronavirus treatment.
Seniors in this category also may be low-income. Thirty-seven percent of traditional Medicare beneficiaries who are without supplemental coverage make less than $20,000 annually. These lower income individuals may struggle to afford coronavirus treatment bills.
“Even before COVID-19, low-income seniors had a heavier chronic disease burden, and they spent a greater portion of their incomes on healthcare compared to older adults with more financial resources,” the issue brief stated.
To ensure that low-income seniors do not face exorbitant healthcare spending and surprise billing due to coronavirus and lack of supplemental coverage, PAN Foundation recommended that CMS move to cap out-of-pocket prescription drug costs. The organization also suggested spreading the costs across the benefit year.
This is not a new stance for the organization, nor is it alone in advocating for this strategy.
In January 2020, the PAN Foundation set forth its position as number three in its 2020 position statement, a cap on annual out-of-pocket costs. The organization went on to share how a monthly cap would allow seniors to expect the bill and know how much money they would need to set aside for it.
Parts of this strategy have been suggested in the Senate and by the Trump Administration. Among the prescription drug spending proposals that policymakers hammered out toward the end of 2019, the Senate Finance Committee approved one that caps beneficiary out-of-pocket healthcare spending at $3,100. The Trump Administration’s 2020 budget included an out-of-pocket spending cap on the Medicare Part D catastrophic phase.
Over 90 percent of coronavirus-related deaths in the US—as of April 30, 2020—have hit the older demographic, with 92 percent of coronavirus fatalities occurring amongst people 55 years of age and older. Given these realities, evaluating Medicare’s ability to provide affordable coverage is critical as Medicare forms a safety net for these populations. Source: PAN/Xtelligent Media.
To choose right Medicare Advantage Plan, Medicare Supplement Plan, or Medicare Prescription Drug Plan contact Sudhir Mathuria at 713-771-2900