Retirement Reform Blog

As if the Democrats' proposed health care bill is not enough to send a person to the urgent care clinic, there is a lesser-known move that has garnered attention among those concerned about the growing entitlement burden: the House voted this week to approve a package which would eliminate the "Medicare trigger."

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It is bad enough that the federal cigarette tax will more than double under the Obama Administration, disproportionately affecting the poor.  But now low-income seniors may pay more for their health insurance.  The Centers for Medicare and Medicaid Services is reducing payments to insurers for Medicare Advantage plans.  Medicare Advantage is a private plan in which the government reimburses insurers rather than physicians.  It allows seniors to buy into plans that provide more benefits than traditional Medicare at a lesser cost.  These plans are particularly appealing to low-income seniors.  However, reducing payments to insurers will force insurers to recoup the payments elsewhere, most likely by increasing seniors' premiums.  (Read more here in the Wall Street Journal)

An estimated 9 million seniors are covered on Medicare Advantage.  In 2004, America's Health Insurance Plans (AHIP) estimated that almost half of Medicare Advantage enrollees had incomes of less than $20,000 a year.  Lower costs was the primary reason that enrollees chose Medicare Advantage.  If the new administration truly wants to provide health insurance for all, it could start by not chipping away at a program that already provides coverage to 9 million.