Upcoming Health Insurance Tax Could Increase Costs for Seniors

The rising costs of health care remain a great concern to seniors and disabled individuals across the United States. As the new Congress begins its work following the government shutdown, Members face a decision on a multi-billion-dollar tax on health insurance coverage that would impact the costs and benefits under Medicare Advantage.

As part of the Patient Protection and Affordable Care Act (ACA), an annual tax was imposed on health insurance premiums called the Health Insurance Tax (HIT). The HIT is a tax that applies to individual policies, small group plans, employers who are not self-insured, Medicaid managed care, Medicare Part D, and Medicare Advantage. If you are enrolled in Medicare Advantage or a Medicare Part D plan, the HIT could have a significant impact on you.

The HIT would likely result in increases in plan premium costs, less cost sharing reductions for beneficiaries, fewer supplemental benefits provided under plans, or a combination of all three. The HIT has been suspended in previous years, but it is scheduled to return in 2020. If it allowed to go into effect, annual plan premiums could increase by $241 for the average beneficiary and approximately $500 for the average couple on Medicare Advantage. Research shows that over 25% of the financial burden of the HIT is carried by Medicare Advantage and Medicare Part D enrollees.

We know beneficiaries value their Medicare Advantage coverage for the high-quality, affordable care it provides. More than half of all Medicare Advantage beneficiaries live on less than $30,000 a year and most live on fixed incomes. Protecting seniors and individuals on disabilities in Medicare Advantage from cost increases should be a high priority for policymakers.
Suspending the HIT for 2020 is one of the most direct ways for Congress to provide financial relief for seniors and disabled individuals who rely on Medicare Advantage plans to maintain access to quality health care and prescription drug coverage.

Two bills have been introduced that would delay the HIT Tax for 2020 and 2021. In the Senate, S. 172 is sponsored by Senators Cory Gardner (R–CO), Jeanne Shaheen (D-NH), John Barrasso (R-WY), Doug Jones (D-AL), Tim Scott (R-SC), and Kyrsten Sinema (D-AZ). A companion bill, H.R. 1398 has been introduced by Representatives Ami Bera (D-CA), Josh Gottheimer (D-NJ), Jackie Walorski (R-IN), and Kenny Marchant (R-TX) in the House of Representatives.

Better Medicare Alliance supports bipartisan efforts to protect Medicare Advantage beneficiaries from rising health care costs. We have voiced our strong support for delaying or repealing the HIT. We will continue to advocate for this action and will continue to monitor legislative progress towards that goal Demonstrating support for Medicare Advantage by requesting a suspension of the HIT for 2020 is critically important. We encourage you to contact your member of Congress and Senators and urge them to co-sponsor these bills. To do so, sign our petition today!

Want Better Retirement? Better Health Care? Learn How to Become a Senior Advocate

Are you concerned about prescription drug prices in Medicare? Perhaps you have a chronic condition and you are worried about how Medicare will cover your bills?

We are less than two months away from a midterm election and a new Congress. It is now more important than ever to make sure your voice is heard in Washington. Last year, Better Medicare Alliance (BMA) senior advocates sent 10,000 letters, made phone calls and signed petitions to successfully advocate Congress to ensure chronically ill Medicare beneficiaries have access to the high-quality care through passage of the CHRONIC Care Act.
Let’s build on that success! Better Medicare Alliance has created four voluntary senior advocate task forces. Our task forces are smaller groups of senior advocates that are passionate about certain issues that impact people enrolled in Medicare Advantage. When you sign up to join one of our tasks forces you will gain access to special resources on the part of Medicare Advantage you’re most passionate about.

Join one (or more) of the following task force:

Chronic Disease Task Force
Join our chronic disease task force to protect critical Medicare Advantage chronic disease care and work directly with Better Medicare Alliance to ensure seniors with chronic disease continue to receive high-quality, affordable health care through Medicare Advantage. Medicare Advantage has been at the forefront of developing and incentivizing ground-breaking ways to prevent, diagnose and treat chronic diseases such as diabetes, hypertension and heart disease.

Keep Our Prescription Drugs Affordable (KOPDA) Task Force
Prescription drug prices are on the rise affecting millions of seniors on Medicare Advantage, many of whom struggle to pay the out-of-pocket costs for their life-saving medications. Better Medicare Alliance understands the negative impact high drug prices have on beneficiaries and supports developing policies that make prescription drugs more affordable for everyone. Join our Keep Our Prescription Drugs Affordable Task Force to ensure seniors on Medicare Advantage have access to affordable and effective prescription medicines.

Medicare Advantage Retiree Plans Task Force
Join our Medicare Advantage Retiree Plans Task Force to protect Medicare Advantage plans provided to retirees by their former employers. Over four million retirees across the country are enrolled in a Medicare Advantage health plan sponsored by a former employer. These seniors depend on high-quality, affordable care, and continued funding for these plans.

Medicare My Way Task Force
Join our Medicare My Way Task Force to work directly with Better Medicare Alliance to advise the government on how to improve Medicare and advocate for what services you think your Medicare Advantage plans should cover, including supplemental benefits.

What happens next?

If you join our task forces, participation is free and completely volunteer-based – we just ask for 1-2 hours of your time each month. As an organization with over 115+ Allies we want to represent the voice of Medicare Advantage seniors around the nation.

The most important goal of our task force is education. Education is key for advocating for Medicare Advantage. We will provide you with legislative updates and talking points, so you can better advocate for each issue.

Some of the activities you will be asked to participate in when you join a task force include surveys, petitions, calls to other seniors, calls to offices of members of congress, and drafting letters and op-eds about positive experiences.

What about Drug Prices in Medicare?

Prescription drug prices are a concern to almost everyone and that concern has captured the attention of policymakers. This is certainly true, many Medicare enrollees who have seen high out-of-pocket costs, particularly for specialty drugs.

The first step in tackling the question of how to keep drug costs down is to know how drug pricing works. Here’s a start:

Drug prices start with pharmaceutical companies. Pharmaceutical companies set prices for their products independently and can increase them at will. This often results in high out-of-pocket costs for consumers, as well as increased costs throughout the entire system.

Medicare Advantage-Part D (MAPD) plans and standalone Part D Prescription Drug Plans (PDPs)work to deliver value for seniors and for taxpayers by negotiating lower prices directly with pharmaceutical companies. They are able to do this by working with Pharmacy Benefits Managers (PBMs), such as CVS Caremark or Express Scripts, who are able to negotiate lower drug prices with pharmaceutical companies through the use of rebates.

Rebates are a vital tool used by health plans to lower drug premiums for their beneficiariess. Without the use of rebates, health plans would have no leverage to negotiate lower drug prices with pharmaceutical companies, resulting in increased premiums for health plan enrollees.Consumers are also able to change plans each year to better meet specific financial and health needs to help manage the prescription drug costs, should their medical or financial needs change over time.

The prescription drug supply chain needs comprehensive reform to protect seniors and those with disabilities on Medicare from high prices, abrupt increases, as well as rising drug costs in both routine medications and specialty prescription drugs. As beneficiaries, you can contact your representatives to motivate legislative change and you can share your stories to better build a case when we advocate for the stability of drug prices for our 400,000 advocates.