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.
Kaiser Health News is an editorially independent news service. It is a program of the Kaiser Family Foundation, a nonpartisan health-care-policy research organization unaffiliated with Kaiser Permanente.