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Expanded Medicare Benefits Plan Raises Questions of Equity

Aug. 2, 2021, 9:36 AM

The Democrats’ plan to add hearing, vision, and dental coverage to Medicare is stirring debate about its potential effect on low-income beneficiaries and whether it advances the push for greater health equity.

“I’m not sure it closes the gap in equality or the gap in access for underserved communities,” Michael Lutz, a senior consultant at Avalere Health, said.

The benefits, which could cost $358 billion over 10 years, would quiet years of complaints about program coverage and give all beneficiaries better health options.

But given Health and Human Services Secretary Xavier Becerra’s calls for racial and social equity in federal health programs, some feel the proposal would help reduce health disparities more effectively if it was targeted to those in need.

Pitch for Medicaid

Katherine Hayes, director of health policy at the Bipartisan Policy Center, favors a different approach: incentivize states to provide hearing, dental, and vision coverage for low-income adults through Medicaid.

“In a world of limited resources, particularly as we’re talking about the reconciliation bill, we really need to think hard about whether you want to create a benefit that is not targeted to the most vulnerable populations,” Hayes said.

Competing interests in the reconciliation process assure that new Medicare benefits will mean less funding for other priorities, Hayes said. That includes $400 billion that President Joe Biden has called for to expand home and community-based care for seniors, Hayes said.

In 2019, the Congressional Budget Office estimated that Medicare would pay $238 billion for dental care over 10 years, $89 billion for hearing services, and about $30 billion for vision care.

Providing the benefits through Medicaid, however, would leave out too many people, said Georgia Burke, Oakland, California-based directing attorney for Justice In Aging, which supports the Medicare plan.

Burke said 18 states cut Medicaid eligibility for adults who earn more than $794 a month. “That leaves out a lot of people who would still have no way that they could afford dental, vision, and hearing,” she said.

Among Medicare beneficiaries, 68% of Black beneficiaries and 61% of Hispanics didn’t visit a dentist last year, compared with 42% of Whites, according to the Kaiser Family Foundation. For those with low incomes, 73% didn’t see a dentist last year.

Greater Acceptance With Medicare?

Providers, especially dentists, would be far more likely to accept patients with Medicare coverage than those with Medicaid, Burke said. Expanding coverage through Medicare makes it easier to access care—which does advance health equity, she said.

“If it’s broad enough, and you’ve got enough patient population, providers will become part of it,” Burke said of a potential Medicare expansion. “I really think it’s the way to go.”

But Lutz said making the benefits universal could potentially “help more of your middle-tier individuals, as opposed to your lowest-income, most disadvantaged beneficiaries.”

Many low-income beneficiaries already get dental, vision, and hearing benefits through their Medicare special needs plans, Lutz said. But these private Medicare Advantage plans only accept beneficiaries with specific chronic conditions, those in institutional settings, and low-income “dual eligibles” who qualify for both Medicare and Medicaid.

Lutz said low-income, fee-for-service beneficiaries not enrolled in these plans may not be able to afford the premiums for the new benefits under Medicare’s outpatient “Part B” coverage.

Some could qualify for state financial assistance through Medicare savings programs. But the extra cost could be a deal breaker for others, Lutz said, especially those who have only Medicare “Part A” hospital coverage—which requires no premium for most people.

“If they’re already not willing to pay the premium for Part B coverage, I don’t know that this incentivizes them to go ahead and purchase that coverage,” Lutz said of the proposal.

That leaves mid-income beneficiaries with Part B coverage and those who pay “several hundred dollars a month” for Medicare supplemental coverage, as the most likely to use the new benefits, Lutz said.

“They’re the ones that currently don’t have access to these services and, if they need these services, are likely paying for them out-of-pocket or through their supplemental plan,” Lutz said.

Burke said the Medicare program could provide additional subsidies to make it easier on low-income enrollees. “Dental, and vision and hearing, those are core services and they belong in that health-care bucket, which is Medicare,” Burke said.

But Hayes, of the Bipartisan Policy Center, remains leery. She said she supports the concept of expanding coverage. And even though premiums would pay about 25% of the cost, doing so through Medicare leaves her wondering “would this be the best use of $358 billion?”

To contact the reporter on this story: Tony Pugh in Washington at tpugh@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Brent Bierman at bbierman@bloomberglaw.com