With four weeks (more or less) to go in the open enrollment season, many Medicare beneficiaries are shopping for plans for the first time. One of the biggest surprises for those who haven’t done their homework is the discovery that basic Medicare doesn’t cover dental, vision or hearing services: these important benefits require additional policies from private insurance companies. However, several bills now wending their way through Congress could change that situation, as we learned from this article that appeared last week on the CNBC website. This likely won’t affect 2020 plans but it’s a debate that’s important to track.
Boosting Medicare Benefits to Add Services, Cap Drug Costs
According to CNBC reporter Sarah O’Brien, Medicare beneficiaries would get dental, vision and hearing coverage if several bills now before Congress pass, representing a major improvement in coverage for Medicare’s 60 million beneficiaries. Also inching through Congress: legislation finally allowing Medicare to negotiate with drugmakers to determine the cost Medicare will pay. The Congressional Budget Office (CBO) estimates that this new law could save $345 billion in government spending between 2023 and 2029. (This proposed legislation on prescription drugs would also create a cap on individual out-of-pocket spending for prescriptions, something basic Medicare does not presently offer.)
“All [these proposals] have cleared the necessary committees over the last couple of weeks and now await full House action,” says CNBC’s O’Brien. However, she cautions, these new pieces of legislation “are generally supported by Democrats and opposed by Republicans. This means that even if the measures get approved in the Democrat-controlled House, they would face an uphill battle in the Republican-dominated Senate.” But even this might represent some degree of progress. As one official at the Center for Medicare Advocacy put it, “There have been proposals over the years that would do this, but in the past they haven’t gone anywhere. It looks like this time something could get passed in at least one chamber of Congress.”
Boosting Medicare Benefits for 10,000 Newly-Eligible Boomers Every Day
Every day roughly 10,000 baby boomers turn 65 and become eligible for Medicare. Neither Part A (hospitalization coverage) nor Part B (outpatient coverage) includes dental, vision or hearing benefits, so beneficiaries who want this type of coverage either purchase stand-alone policies or opt for a Medicare Advantage Plan as an alternative. Most MA plans offer at least some dental, vision and hearing benefits and some are quite comprehensive. “However, those benefits also might be limited to the carrier’s dental network or require prior authorization that the treatment is medically necessary,” one insurance broker told CNBC. Currently more than 22 million people, about 37 percent of Medicare beneficiaries, have Medicare Advantage plans. The Center for Medicare Advocacy said that the expansion of benefits would represent “a significant improvement to the program and fill holes that have been there since its inception.”
According to the CNBC report, there are four different bills under consideration in the Democratically-controlled House of Representatives. In brief, these proposals are:
- H.R. 3: This proposal caps out-of-pocket prescription spending at $2,000 annually and empowers Medicare officials to negotiate with drug manufacturers in order to control prescription costs.
- H.R. 4650: This proposal adds a range of dental services to Medicare Part B, including oral exams, cleanings, tooth restorations and extractions, bridges, crowns, root canal treatments and implants and dentures. Beneficiaries would contribute 20 percent of the cost of basic treatments and 50 percent for major treatments.
- H.R. 4665: This proposal enhances Medicare Part B with vision coverage, including routine eye exams and some cost-sharing ($100 total) for glasses and contacts. Beneficiaries would generally pay 20 percent of the cost of exams.
- H.R. 4618: This bill adds hearing exam and hearing aid coverage to Part B. Again, beneficiaries would generally contribute 20 percent of the cost.
Boosting Medicare Benefits Affects Millions, Costs Billions
Medicare is a huge part of the federal budget that touches the lives of many millions of Americans, so anything that affects its financial health is bound to be contentious. In 2018 Medicare spending represented nearly 4 percent of U.S. gross domestic product, a figure which will hit 6 percent in the next 20 years. As noted above, the CBO, which according to CNBC has not yet released an estimate on how the expansion of benefits would impact Medicare’s spending, projects the savings in drug costs at $345 billion over seven years if negotiating with drugmakers were allowed. Last year Medicare spending on hospital, outpatient care and prescription drug benefits hit $740 billion.
Opposition to the House bills generally revolves around one objection: cost. As CNBC’s O’Brien notes, “The more immediate concern among opponents of the measures now headed for a possible House vote is that the trust fund for Part A (hospital coverage) is anticipated to be depleted in 2026 unless Congress acts before then,” potentially cutting Part A benefits by more than 10 percent. One leading House Republican, Kevin Brady (R-Texas), said, “We are … considering four bills that expand Medicare benefits as this important program is facing bankruptcy and have no responsible way to pay for them.” Needless to say, here at AgingOptions we’ll keep a close eye on this important debate.
The Best Prescription for Retirement Health: a LifePlan from Aging Options
We recognize that legislation in and of itself can’t solve all our problems, but this is one case where decisions made in Washington will have far-reaching implications. For us here at AgingOptions, the lesson from articles like these is clear: you owe it to yourself and your family to take care of your health. One first step, if you’re an older adult, is to seek out the services of a geriatrician for your primary health care needs. Well-trained in the particular needs of seniors, a board-certified geriatrician will take the time to get to know you and to listen to you. Your geriatrician will then guide you into a health care regimen that’s individually tailored for you – just the opposite of an impersonal plan prescribed by too many doctors.
When it comes to retirement planning, the individualized, personalized approach is always the best. Here at AgingOptions we recommend a strategy called LifePlanning, an approach that blends all the essential elements of a comprehensive retirement plan into one carefully crafted document. Everything in your LifePlan fits together interdependently: finances, legal matters, housing desires, medical protection, and family communication. That’s the genius of an AgingOptions LifePlan. To find out more, without cost or obligation, we invite you to join Rajiv Nagaich at an upcoming LifePlanning Seminar. For a calendar of currently scheduled seminars, visit our Live Events page and register online for the seminar of your choice – or, if you prefer, give us a call during the week. Age on!
(originally reported at www.cnbc.com)