Unlike most modern health insurance coverage, Original Medicare has no out-of-pocket maximum, exposing beneficiaries to limitless financial risk. While Medicare Advantage (MA) plans do include an out-of-pocket maximum in their benefit packages, the threshold is too high. This means people with high health care needs can be forced to make impossible choices between paying for rent, food, or their essential health care or medicines. Policies that cap out-of-pocket costs are already in place for the employer and individual markets, including Marketplace plans under the Affordable Care Act (ACA). People with Medicare must not be left behind.

Medicare benefits for skilled nursing facilities (SNFs) hinge on a complicated concept, the three-day rule. This rule requires beneficiaries to be hospital inpatients for three consecutive days before Medicare will cover SNF admittance. But Medicare beneficiaries needing hospital care often find themselves classified as “outpatients,” and/or in “Observation Status” rather than admitted as inpatients. Observation Status patients often receive care that is indistinguishable from the care provided to individuals who have been formally admitted as inpatients, and observation stays can last for several days. This penalizes patients who have no control over how they will be classified and makes the Medicare distinction between the two statuses illogical and punitive.

While it is relatively easy for a Medicare beneficiary to enroll into and disenroll from a Medicare Advantage (MA) plan on an annual basis, there are limited windows of opportunity to join a Medigap plan. This means that people who want to switch from MA to traditional Medicare may not have the option for supplemental coverage they need, which may lock them into MA coverage. In order for Medicare beneficiaries to have true freedom of choice concerning their coverage options, Medigap plan access must be strengthened.