Thursday, February 6, 2014

Fight bipartisan plan to tax Medigap

Senior citizens face the fight of their lives over Medicare and it’s  a battle they need to prepare themselves to wage.

For some time there has been bipartisan support to tax Medigap policies in order to control Medicare,  but now a new study is giving ammunition to advocates of this approach.

Bipartisanship is a great thing and extolled here at “Between Extremes.” But not this type of bipartisanship.

Chuck Austin of Oakland County (Mich.), head of the SeniorNews and Advocacy Coalition, called our attention to the study by University of Chicago and University of Texas researchers that claims Medigap policies are adding 22 percent annually to Medicare costs.  They propose a 15 percent tax on Medigap policies to discourage their use.

Medigap is supplemental private insurance senior citizens purchase to pick up expenses that  Medicare fails to cover. Medicare only covers 80 percent of most expenses and there is no out-of-pocket maximum on medical costs that individuals may incur.

Think of it. Without Medigap, senior citizens with serious illnesses such as older people normally suffer would end up in the poorhouse.

There is no disputing the figures the researchers came up with. But there is insufficient evidence to show that the costs are not covering vital health services, which, of course, is the whole purpose of Medicare.

"They can say nothing at all about whether that utilization is life-saving cancer care or discretionary back surgery," Bruce Vladeck, who ran Medicare under President Clinton,  told Kaiser Health News. "Maybe it would be a good paper in a graduate econometrics course, but it just doesn't reflect reality."

To be sure, Medicare expenses need to be controlled. But there are many other ways to do so, and many common-sense policies were advocated  by the President’s National Commission on Fiscal Responsibility and Reform in 2010.

But the idea of a 15 percent tax on Medigap policies is outrageous. Yet the idea of a tax or surcharge is supported by both President Obama and House Budget Committee Chairman Paul Ryan, according to KHN.

Senior citizens need to brace themselves to fight to protect their life savings.

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