The Government Accountability Office (GAO) has released a new report entitled, “Medigap and Other Factors Are Associated with Higher Estimated Health Care Expenditures.” The analysis says, “estimated average total health care expenditures were higher for beneficiaries with Medigap” than for beneficiaries with traditional Medicare.
But the report also notes that differences in expenditures can be at least partially explained by factors other than whether a beneficiary has supplemental coverage, including health status and the age of the beneficiary.
The report says that Medigap policyholders are more likely to have chronic conditions that are complex and more expensive to manage. On average Medigap policyholders have a higher incidence of one or more health care conditions than the Medicare population as a whole. Most significantly, the GAO analysis says that a reduction in cost-sharing for certain services may increase expenditures for other services and threaten the affordability of care.
Medigap policyholders represent some of the most vulnerable populations. Evidence shows that Medigap provides financial security and peace of mind to those who need it most. Medigap helps millions of these seniors and beneficiaries with disabilities to budget for medical costs and avoid the confusion and difficulty of handling complex medical bills.
The report also does not fully take into account recent changes in Medigap plan design, most notably the availability since June 2010 of Plan N, which requires some enrollee cost-sharing.
For more information on the value Medigap provides to over 10 million Medicare beneficiaries, visit The Partnership to Protect Medigap.