Proposed Improvements to Medicare Coverage and Enrollment Offer Important Protections

This week, the Medicare Rights Center submitted a letter of strong support for the Medicare Affordability and Enrollment Act of 2016. Introduced this fall, this bill would cap beneficiaries’ out-of-pocket expenses in Traditional Medicare; eliminate coverage gaps associated with Part B enrollment mistakes; reduce cost-sharing for low-income beneficiaries; increase eligibility for income-dependent programs; and modernize the Medicare enrollment system to facilitate easier enrollment, begin coverage earlier and reduce arbitrary late-enrollment penalties that today are paid for a lifetime.

According to Joe Baker, president of the Medicare Rights Center, “This legislation takes a great leap forward in modernizing our health system and improving the lives of millions.”

By capping out-of-pocket expenses in Traditional Medicare, trimming cost-sharing for those with low, fixed incomes, and extending income eligibility for premium and cost-sharing assistance, this legislation would greatly increase the affordability of Medicare and enhance beneficiaries’ financial security. Further, people with Medicare who have low incomes would significantly benefit through much needed clarification and consolidation of rules around resources, eligibility, and enrollment for the Medicare Savings Programs and Extra Help, also known as the Part D Low-Income Subsidy. These changes would streamline the administration of these programs and enhance their fairness.

Importantly, the bill also advances long overdue improvements to the Medicare enrollment process. Enrolling in Medicare is not always easy. For instance, people newly eligible for Medicare may face coverage gaps when they follow all instructions but enroll during the three months following their 65^th birthday. Those who delay enrollment based on misunderstandings about their coverage may also encounter months-long coverage gaps. By eliminating these and other gaps, this legislation prevents beneficiaries from going without necessary coverage or necessary care.

Finally, this bill also appropriately alleviates the excessive burden of the lifetime Part B late enrollment penalty (LEP). Drawing from the penalty rules under Medicare Part A, the bill limits the Part B LEP to only twice as long as an individual delayed Medicare enrollment. We believe this strikes an appropriate balance—leaving in place an incentive to encourage enrollment for those newly eligible without unduly burdening those who make honest mistakes.

The bill was introduced in the Senate by Finance Committee Ranking Member Ron Wyden, (D-OR). Original co-sponsors of the bill in the Senate sponsors include Debbie Stabenow, (D-MI), and Michael Bennet, (D-CO), Bill Nelson, (D-FL), and Sherrod Brown, (D-OH).

A companion bill was introduced in the House by Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ) and co-sponsored by Ways and Means Committee Ranking Member Sander Levin (D-MI), Energy and Commerce Health Subcommittee Ranking Member Gene Green (D-TX), and Ways and Means Health Subcommittee Ranking Member Jim McDermott (D-WA).