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Recently, the Center for Medicare Advocacy laid out our Medicare Platform for the New Congress. One of the core considerations to improve Medicare for all beneficiaries, now and in the future, is the need to preserve and expand consumer protections and quality coverage for all Medicare Beneficiaries – including parity between traditional Medicare and private Medicare plans. We previously wrote about other key issues currently limiting choice and coverage for Medicare beneficiaries, including limited access to Medigap plans and oral health care. Another important component missing in traditional Medicare is an out-of-pocket cap on beneficiary expenses.

Since 2011, Medicare Advantage (MA) plans have been required to establish a maximum out-of-pocket (MOOP) amount for all Part A and B services (in 2019, the mandatory maximum amount is $6,700). Many individuals in traditional Medicare have other sources of coverage which may supplement their benefits by covering some or all of Part A and B cost-sharing and, sometimes, some benefits not otherwise covered by Medicare. However, traditional Medicare does not have an out-of-pocket limit.

Further, as noted in a recent issue brief by the Kaiser Family Foundation, a sizeable portion of people with traditional Medicare have no supplemental coverage at all:

In 2016, eight in 10 beneficiaries in traditional Medicare (81%) had some type of supplemental insurance, including employer-sponsored insurance (30%), Medigap (29%), and Medicaid (22%) (Figure 1). But nearly 1 in 5 beneficiaries in traditional Medicare (19%)—6.1 million beneficiaries overall—had no source of supplemental coverage in 2016, which places them at greater risk of incurring high medical expenses or foregoing medical care due to costs. […]

Compared to all traditional Medicare beneficiaries in 2016, a larger share of beneficiaries with no supplemental coverage had modest incomes (between $20,000 and $40,000), were age 85 or older, and male. Beneficiaries in traditional Medicare with no supplemental coverage are fully exposed to Medicare’s cost-sharing requirements, unlike people with [employer-sponsored coverage] and Medigap, and lack the protection of an annual limit on out-of-pocket spending, unlike beneficiaries enrolled in Medicare Advantage. [emphasis added]

It’s time to bring Medicare in line with coverage provided through Medicare Advantage plans, Medigaps and other supplemental coverage, and other types of insurance, such as qualified health plans available through the Affordable Care Act – all of which limit out-of-pocket expenses for individuals. Congress should add an out-of-pocket cap to traditional Medicare.

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