Limits on Medigap plans eyed

Chicago Tribune/Reuters, October 11, 2011

Medicare supplemental health plans, popular among politically powerful retirees, could come under the budget knife being wielded by the special deficit-reduction panel of Congress, according to sources keeping close watch on its work. The so-called "Medigap" insurance plans shield the elderly -- many living on fixed incomes -- from costly deductibles and other expenses not covered by the traditional fee-for-service Medicare healthcare program. "This one is clearly on the table," said a lobbyist who has been following "super committee" deliberations on ways to trim federal budget deficits by at least $1.2 trillion over 10 years. But super committee Democrats are unlikely to vote to saddle retirees with new out-of-pocket expenses if Republicans refuse to embrace tax increases for the wealthy. While the elderly buy the private plans, studies suggest they boost government Medicare costs as the extra coverage for deductibles and co-pays encourages greater use of medical services. That, in turn, pushes up costs for Medicare, which has to pay for its portion of the care.

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