U.S. Congress

Why Doesn’t Medicare Cover Services So Many Seniors Need?

Sorry, Joe Namath. Despite what you keep saying in those TV ads, under Medicare, seniors are not “entitled to eliminate copays and get dental care, dentures, eyeglasses, prescription drug coverage, in-home aides, unlimited transportation and home-delivered meals, all at no additional cost.” But if Democratic lawmakers in Congress have their say, seniors could soon be entitled to some of those services.

Namath’s commercial is hawking private Medicare Advantage plans, which frequently do offer benefits traditional Medicare does not — in exchange for being limited to certain doctors and hospitals. “Traditional” Medicare does not cover many benefits used overwhelmingly by its beneficiaries, including most vision, dental and hearing care, and drug coverage is available only by purchasing a separate insurance plan — Medicare Part D.

But Democrats in the House and Senate plan to try to change that as soon as this fall. On Monday, Senate Majority Leader Chuck Schumer released an outline of a coming budget bill that includes a directive to the Senate Finance Committee to expand Medicare “to include dental, vision, hearing benefits.” The catch — all the Democrats in the Senate and almost all in the House will have to agree on the entire budget bill for it to become law.

Still, that raises a question about Medicare: Why has it taken so long to add such obviously needed benefits?

As with almost everything to do with the U.S. health system, the answer is complicated, and a combination of policy and politics.

“Medicare is the kind of program where you’d expect the benefits would be expanded over and over again. It’s popular, and benefits expansions poll well,” said Jonathan Oberlander, a professor of health policy at the University of North Carolina-Chapel Hill and author of the book “The Political Life of Medicare.” “It’s one of the great puzzles of Medicare politics: why benefit expansions have been so rare.”

In fact, in the 56 years since Medicare became law, only a few benefits have been added to the package, which was created to emulate a 1965 Blue Cross/Blue Shield plan. During the 1980s and ’90s some preventive care was added, like pneumonia vaccines and mammograms. Republicans spearheaded the addition of prescription drug coverage in 2003, when they controlled both Congress and the White House. But they decided to make that coverage separate from the program’s traditional benefit package.

Other efforts to expand benefits have not gone so well. In 1988, a bipartisan effort in Congress produced the Medicare Catastrophic Coverage Act, which would have added drug coverage to traditional Medicare and also would have plugged a hole: the fact that there is no limit on the amount patients can be charged for their share of covered services. That law, however, was repealed just a year later after seniors rebelled against being asked to foot most of the bill for the new benefits via a new income “surtax.” Today, Medicare beneficiaries still face the risk of unlimited expenses.

Medicare is funded by a combination of money paid directly to the government from paychecks and taxes paid by working Americans and their employers. That brings us to another big reason Medicare’s benefit package hasn’t been beefed up more — the cost of the current program.

“When Medicare was created, its architects assumed expansion, both in terms of population and in terms of benefits later,” said Oberlander. “They didn’t anticipate the shift in American politics to the right, and they didn’t anticipate that Medicare would be labeled a fiscal problem and that policymakers would be more concerned with avoiding the next trust fund shortfall than expanding benefits.”

Indeed, in the ’80s and ’90s, Medicare spending was more often restrained than expanded. A series of budget reconciliation bills trimmed millions of dollars out of Medicare — usually at the expense of payment to doctors, hospitals and other health providers.

As the years wore on, Medicare has remained popular, but it has grown less generous than most private insurance policies. Many Medicare patients, however, have been able to find supplemental coverage to fill in what Medicare does not cover, through private “Medigap” policies, employer-provided retiree plans or Medicaid for those with low incomes. Increasingly popular in recent years have been those Medicare managed-care plans, now known as Medicare Advantage, that were first authorized in 1982 and often provide extra benefits for members.

All of that “has taken some of the pressure off” lawmakers to expand the program, Oberlander said. And a final reason that vision, hearing and dental care have not been added to standard Medicare is that they are far from the most critical gaps in Medicare’s benefit package.

For example, Medicare does not cover long-term custodial care — the sort of non-nursing, personal care that provides assistance in activities of daily living such as bathing, dressing, eating, getting in or out of a bed or chair, using the bathroom or preparing food. Custodial care tends to be both very expensive ($50,000 to $100,000 a year or more) and needed by a large number of beneficiaries, particularly after age 80. Efforts over the years to create a government long-term care benefit have been largely unsuccessful. A very limited program, the CLASS Act, was part of the Affordable Care Act in 2010 but was repealed before it could take effect because its financing was deemed insufficient. President Joe Biden has called for Congress to include billions of dollars for caregiving in the infrastructure package Democrats will work on this fall.

Also, as previously mentioned, traditional Medicare includes no limits on patient cost sharing — the percentage or amount of a medical bill that a beneficiary must pay. Its basic hospital benefit runs out after 90 days, and the 20% coinsurance (the percentage patients are responsible for) on outpatient care runs indefinitely.

So why are dental, vision and hearing coverage on the front burner now as lawmakers consider beefing up the program? Part may be self-serving for lawmakers tasked with appropriating funds. All three benefits “are less expensive than [adding] nursing home” coverage, said Oberlander.

But a big part is politics. On the campaign trail, Biden promised to lower Medicare’s eligibility age from 65 to 60. “Medicare for All” advocates like Senate Budget Committee Chair Bernie Sanders (I-Vt.) pledged to try to do the same, and lowering the eligibility age is included in the outline Schumer shared with Senate Democrats as an option.

But lowering the eligibility age is vehemently opposed by hospitals and other health providers, who fear they will lose money if people currently covered by higher-paying private insurance are covered by Medicare instead. That makes benefits expansion the much easier choice for Congress.

That is not saying it will happen. The Congressional Budget Office said the vision, hearing and dental benefits included in a bill passed by the House in 2019 would have cost an estimated $358 billion over 10 years. But this is the closest the benefits have gotten to enactment since Medicare’s inception.

HealthBent, a regular feature of Kaiser Health News, offers insight and analysis of policies and politics from KHN’s chief Washington correspondent, Julie Rovner, who has covered health care for more than 30 years.

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Expanding Insurance Coverage Is Top Priority for New Medicare-Medicaid Chief

The new head of the federal agency that oversees health benefits for nearly 150 million Americans and $1 trillion in federal spending said in one of her first interviews that her top priorities will be broadening insurance coverage and ensuring health equity.

“We’ve seen through the pandemic what happens when people don’t have health insurance and how important it is,” said Chiquita Brooks-LaSure, who was confirmed by the Senate to lead the Centers for Medicare & Medicaid Services on May 25 and sworn in on May 27. “Our focus is going to be on making sure regulations and policies are going to be focused on improving coverage.”

It is an abrupt switch from the Trump administration, which steered the agency to spearhead efforts to repeal the Affordable Care Act and scale back Medicaid, the federal-state program for those with low incomes.

Brooks-LaSure, whose agency oversees the ACA marketplaces in addition to Medicare, Medicaid and the Children’s Health Insurance Program, said she is not surprised at the robust takeup of ACA insurance since President Joe Biden reopened enrollment in January. The administration announced last month that more than 1 million people had signed up already.

“Over the last couple of years, I’ve worked with a lot of the state-based marketplaces and we could see the difference in enrollment when the states were actively pushing coverage,” she said. A former congressional and Obama administration health staffer, Brooks-LaSure most recently was managing director at the consulting firm Manatt Health. “I believe that most people who are not enrolled want” coverage but may not understand it’s available or how to get it, she said. “It’s about knowledge and affordability.”

Brooks-LaSure also suggested the administration would support efforts in Congress to ensure coverage for the millions of Americans in the so-called Medicaid gap. Those are people in the dozen states that have not expanded Medicaid under the Affordable Care Act who earn too little to qualify for ACA marketplace coverage. Georgia Democratic Sens. Jon Ossoff and Raphael Warnock, whose GOP-led state has not expanded the program, are calling for a new federal program to cover those who fall in the gap.

Brooks-LaSure said she would prefer states use the additional incentive funding provided in the recent American Rescue Plan toward expanding their Medicaid programs, “because ideally states are able to craft policies in their own states; they’re closest to the ground.” But if states fail to take up the offer — none have so far — “the public option or other coverage certainly would be a strategy to make sure people in those states have coverage,” she said.

Also close on her radar is dealing with the impending insolvency of the trust fund that finances a large part of the Medicare program. Last year’s economic downturn and the resulting loss in employees’ withholding taxes is likely to accelerate the date when Medicare’s hospital insurance program will not be able to cover all its bills.

Brooks-LaSure said she is sure she and Congress will be spending time on the issue in the coming year, but those discussions could also provide an opportunity for officials to reenvision the Medicare program and consider expanding benefits. Democrats in Congress are looking at both lowering Medicare’s eligibility age and adding benefits the program lacks, including dental, hearing and vision coverage.

“I hope that we, when we are looking at solvency, really focus on making sure we keep the Medicare program robust,” said Brooks-LaSure. “And that may mean some changes that strengthen the program.”

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4 Vital Health Issues — Not Tied to Covid — That Congress Addressed in Massive Spending Bill

Late last month, before President Joe Biden took office and proposed his pandemic relief plan, Congress passed a nearly 5,600-page legislative package that provided some pandemic relief along with its more general allocations to fund the government in 2021.

While the $900 billion that lawmakers included for urgent pandemic relief got most of the attention, some even bigger changes for health care were buried in the other parts of that huge legislative package.

The bundle included a ban on surprise medical bills, for example — a problem that key lawmakers had been wrestling with for two years. Starting in 2022, because of the new law, patients generally will not pay more for out-of-network care in emergencies and at otherwise in-network facilities.

But surprise bills weren’t the only health care issue Congress addressed as it ended a tumultuous year. Lawmakers also answered pleas from strained health facilities in rural areas, agreed to cover the cost of training more new doctors, sought to strengthen efforts to equalize mental health coverage with that of physical medicine and instructed the federal government to collect data that could be used to rein in high medical bills.

Here are some details about those big changes Congress made in December.

Rural Hospitals Get a Boost

Throwing a lifeline to struggling rural health systems — and, it appears, a bone to an outgoing congressional committee chairman — lawmakers gave rural hospitals a way to get paid by Medicare for their services regardless of whether they have patients in beds.

The law creates a new category of provider, known as a “rural emergency hospital.” Starting in 2023, some hospitals will qualify for this designation by maintaining full-time emergency departments, among other criteria, without being required to provide in-patient care. The Department of Health and Human Services will determine how the program is implemented and which services are eligible.

Medicare, the federal insurance program that covers more than 61 million Americans 65 and older or with certain disabilities, currently does not reimburse hospitals for emergency or hospital outpatient services unless the hospital also offers in-patient care.

That requirement has exacerbated financial problems for rural hospitals, many of which balance serving communities with fewer patients and less need for full in-patient services with the need for emergency and outpatient services. One study last year found 120 rural hospital facilities had closed in the past 10 years, with more at risk.

Hospital groups have praised the change, which was introduced by Sen. Chuck Grassley (R-Iowa), who has championed rural health issues and ended his term as chairman of the Senate Finance Committee this month. “I worked to ensure rural America would not go overlooked,” he said in a statement.

Medicare Invests in More Doctors

Hoping to address a national shortage of doctors that has reached critical levels during the pandemic, Congress created an additional 1,000 residency positions over the next five years.

Medicare will fund the positions, which involve supervised training to medical school graduates going into specialties like emergency medicine and are distributed among hospitals most in need of personnel, including rural hospitals.

Critics like The Wall Street Journal’s editorial board have noted this is Congress’ attempt to fix a problem it created in the late 1990s, when lawmakers capped the number of Medicare-funded residency positions in the United States, fearing too many doctors would inflate the cost of Medicare.

While Medicare is not the only source of educational funding and hospitals may add their own residency slots as needed, Medicare generally will reimburse hospitals for the number of residents they had at the end of 1996. Among other consequences of that 1996 cap, most Medicare-funded residencies are clumped at Northeastern hospitals, a 2014 study showed.

In contrast to the 1,000 positions created as part of the stimulus package, one bipartisan proposal in 2019 that was never enacted would have added up to 15,000 positions over five years.

Strengthening Mental Health Parity

The legislative package strengthens protections for mental health coverage, requiring federal officials to study the limitations insurance companies place on coverage for mental health and substance use disorder treatments.

In 1996 Congress passed the first law barring health insurers from passing along more of the cost for mental health care to patients than they would for medical or surgical care. The Affordable Care Act, building on earlier laws, made mental health and substance use disorder treatments an “essential health benefit” — in other words, it required most health insurance plans to cover mental health care.

But enforcing that standard has been a challenge, in part because violations can be hard to spot and the system has often relied on patients to notice — and report — them.

In December, lawmakers approved a measure requiring insurers to analyze their coverage and provide their findings to state and federal officials upon request.

They also instructed federal officials to request the findings from at least 20 plans per year that may have violated mental health parity laws and tell insurers how to correct any problems they find — under penalty of having insurer violations reported to their customers if they do not comply.

The law requires federal officials to publish an annual report summarizing the analyses they collect.

More Transparency in Cost and Quality

Americans often do not know how much they will be expected to pay when they enter a doctor’s office, an ambulance or an emergency room.

Taking another modest step toward transparency, Congress banned so-called gag clauses in contracts between health insurers and providers.

Among other things, these sorts of “gag” restrictions previously have prevented insurers and group health plans from sharing with patients and others — such as employers — information about a provider’s prices or quality. The December legislation also prohibited insurers from agreeing to contracts that prevent them from getting access electronically to claims and other information from providers on behalf of the insurer’s enrollees.

In 2018, Congress banned gag clauses in contracts between pharmacies and insurers or pharmacy benefit managers. Those gag clauses had prevented pharmacists from sharing cost information with patients, like whether they could pay a lower price for a prescription by paying out-of-pocket rather than using their insurance coverage.

The proposal approved in December’s legislation came from a big, bipartisan package of health care cost fixes passed in 2019 by the Senate Health, Education, Labor and Pensions Committee, but not by the rest of Congress. The committee’s Republican chairman, Sen. Lamar Alexander of Tennessee, retired from Congress this month. His Democratic partner on that package, Sen. Patty Murray of Washington, will take over the chairmanship as Democrats assume control of the Senate and has vowed to focus on health care affordability.

Consumers First, a health consumer-focused alliance of health professionals, labor unions and others, led by Families USA, praised the ban. The change is “a significant step forward” to stop “the abusive practices from hospitals and health systems and other segments of the health care sector that are driving up health care costs and making health care unaffordable for our nation’s families, workers, and employers,” it said in a statement.

KHN senior correspondent Sarah Jane Tribble contributed to this report.