Bill to Cap Out-of-Pocket Medicare Costs Returns

Democrats in Congress have revived an effort to protect Medicare enrollees from high medical costs.

Lawmakers’ new Choose Medicare Act bill would cap Medicare enrollees’ out-of-pocket costs at $6,700 per year starting in 2026. The bill would also create a Medicare Part E plan open to people of any age.

Today, people who sign up for original Medicare without buying supplemental coverage face unlimited exposure to “cost-sharing” bills.

Sen. Jeff Merkley, D-Ore., returned as the bill sponsor in the Senate. Rep. Jimmy Gomez, D-Calif., is back as the sponsor in the House.

What it means: If the bill passes, it could reduce clients’ need for either Medicare Advantage plans or Medicare supplement insurance policies.

The bill: The Medicare Part A program pays for inpatient hospital bills. The Medicare Part B program pays for outpatient care and physician services.

More than 75% of the enrollees use Medicare Advantage plans, Medicare supplement insurance or programs aimed at low-income people to handle Medicare cost-sharing bills.

Medicare enrollees who have no supplemental coverage can end up owning tens of thousands or more on deductibles, coinsurance amounts and co-payments.

Johns Hopkins researchers found in 2017 that 10% of Medicare enrollees with no supplemental coverage who have cancer end up spending more than $17,866, or more than 63% of their total annual household income, on out-of-pocket medical costs.

Most of the rest of the Choose Medicare Act bill would affect people younger than 65.

The bill also would create a Medicare Part E plan program for anyone younger than 65 who wanted Medicare coverage. Medicare Part E managers would provide a national “public option” health program — a government-run alternative to private health insurance — by selling Part E plans through the Affordable Care Act public health insurance exchange system.

Another bill provision would encourage states to take corrective actions to “ensure that any excessive, unjustified, or unfairly discriminatory rates are corrected prior to implementation, or as soon as possible thereafter.” States could correct what regulators see as faulty rate increases by denying the efforts to increase rates, changing the rates or requiring insurers to send rebates to the customers.

The history: The versions of the Choose Medicare Act bill for the 118th Congress are S. 4231 in the Senate and H.R. 8207 in the House.

The Senate version has 11 Democratic co-sponsors, and the House version has three Democratic co-sponsors.

Neither version has a Republican co-sponsor.

Merkley and other Democrats began introducing versions of the bill in 2017, during the 115th Congress. The earlier versions died in committee, without reaching the House or Senate floor.

Credit: CMS