3.3.3: First-Dollar Coverage
Restrict first-dollar coverage in Medicare supplemental insurance. Other Information:
(Medigap savings included in previous option. Additional savings total $4 billion in 2015, $38 billion through 2020.) The
ability of Medicare cost-sharing to control costs – either under current law or as proposed above – is limited by the purchase
of supplemental private insurance plans (Medigap plans) that piggyback on Medicare. Medigap plans cover much of the cost-sharing
that could otherwise constrain over-utilization of care and reduce overall spending. This option would prohibit Medigap plans
from covering the first $500 of an enrollee’s cost-sharing liabilities and limit coverage to 50 percent of the next $5,000
in Medicare cost-sharing. We also recommend similar treatment of TRICARE for Life, the Medigap policy for military retirees,
which would save money both for that program and for Medicare, as well as similar treatment for federal retirees and for private
employer-covered retirees.
Indicator(s):
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