To promote health equity, meaningful choice, competition between Traditional Medicare and Medicare Advantage plans, as well as to protect older adults and people with disabilities, Congress should limit people’s out-of-pocket expenses in Traditional Medicare by adding an out-of-pocket cap. Congress also should eliminate the enormous overpayments to Traditional Medicare in order to ensure the sustainability of the Medicare Trust Fund and bring down Part B premiums.
Health equity: People of color and people with limited means are usually forced to choose among Medicare Advantage plans without being able to know which will cover their care appropriately. They are at serious risk. They are often locked into Medicare Advantage plans with very narrow networks and excessive prior authorization requirements because Traditional Medicare does not have an out-of-pocket limit and they cannot afford supplemental coverage.
Medicare Advantage insurers are able to decide which Medicare Advantage plans offer more or fewer prior authorization requirements and better provider networks; but, there’s no way for consumers to know. The Medicare Advantage star-rating system is a farce; five-star plans can be bad actors, with ghost networks and widespread inappropriate delays and denials of care. The Centers for Medicare and Medicaid Services (CMS) has no way to protect vulnerable Medicare Advantage enrollees. Without an out-of-pocket cap in Traditional Medicare, they generally do not have it as an option.
Choice: An out-of-pocket cap in Traditional Medicare would give people a meaningful choice of Traditional Medicare. It would allow people to enroll in Traditional Medicare without financial risk. Low and middle-income people and people of color lack this choice today because they cannot get the supplemental coverage they need to protect themselves financially. Supplemental coverage is either unaffordable or unavailable.
Indeed, today, people living in communities that insurers do not see as profitable, typically lower-income communities, can be left without any MA plan options and no meaningful Traditional Medicare option.
Competition: An out-of-pocket cap would help level the playing field between Traditional Medicare and Medicare Advantage, driving competition.
Cost savings: In 2024, Medicare Advantage plans cost as much as 22 percent more per person than Traditional Medicare, eating into the Medicare Trust Fund and driving up Part B premiums. Traditional Medicare is far more cost-effective than Medicare Advantage. An out-of-pocket cap in Traditional Medicare would enable more people to enroll, reducing Medicare spending.
Coverage: An out-of-pocket cap would protect people in Medicare Advantage plans who are too often inappropriately denied the reasonable and necessary services to which they are entitled. It would enable them to switch to Traditional Medicare. Today, the government cannot protect them from bad actor Medicare Advantage plans. The most vulnerable Medicare subpopulations are hardest pressed to navigate the rules and narrow networks in Medicare Advantage and get the care they need.
Here’s more from Just Care:
- Five things to think about when choosing between traditional Medicare and a Medicare Advantage plan
- How to switch to Traditional Medicare from Medicare Advantage?
- If you want easy health care access and good quality care, you probably want traditional Medicare
- The choice between traditional Medicare and Medicare Advantage: It’s a sham
- Traditional Medicare v. Medicare Advantage? Different as night and day
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