Personal Finance

These Medicare changes may be included in the next coronavirus relief package

Key Points
  • Some Medicare provisions that were in the House-passed Heroes Act might make it into the Senate's version of a stimulus bill, expected in late July.
  • One advocacy goal is to ensure that certain would-be beneficiaries can access Medicare right away instead of having to wait for a specific enrollment window.
  • Other goals include making sure people understand how COBRA coverage interacts with Medicare, as well as increasing federal funding to maintain services for the 12.2 million beneficiaries who also are enrolled in Medicaid.

Changes to Medicare that advocates have been seeking may end up in the next federal coronavirus relief legislation,  experts say.

The Republican-controlled Senate is expected to unveil its version of the next stimulus package in late July as the Covid-19 pandemic continues to slow economic recovery and unemployment remains high.

Senate Majority Leader Mitch McConnell, R-Kentucky, indicated in public comments Monday that the theme of the next relief legislation would be "liability reform, kids in school, jobs and health care."

Karen Ducey | Getty Images

While specifics of the legislation are uncertain, consumer advocates hope to see provisions that would improve access to Medicare, which provides health care coverage to about 62.4 million beneficiaries — the majority of whom are age 65 or older and more likely to suffer complications from the coronavirus. The program also covers younger individuals with disabilities and people with end-stage renal disease.

"I suspect there will be some Medicare provisions," said Tricia Neuman, executive director of the Medicare policy program at the Kaiser Family Foundation, a nonprofit group focused on health care research and policy.

The Democrat-dominated House already passed its version of the next round of stimulus — called the Heroes Act — but the Senate is not expected to consider it. Nevertheless, lawmakers in the upper chamber could use parts of that bill for inclusion in whatever they propose.

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"Even though the Heroes Act wasn't bipartisan, some things in it may have a chance because they are logical and bipartisan asks," said Lindsey Copeland, federal policy director for the Medicare Rights Center, an advocacy group.

Here are the Medicare provisions Copeland says could make it into the next stimulus package.

New enrollment window

Some people miss the deadline for enrolling in  basic Medicare — Part A hospital coverage and/or Part B outpatient coverage — even if they are 65, which otherwise would make them eligible.

Instead, unless they meet an exception qualifying them for a special enrollment period, they have to wait until Medicare's annual general open enrollment, which is Jan. 1 to March 31, with coverage starting July 1. That delay could mean life-lasting late-enrollment penalties for not signing up when they should have, as well as a potential gap in health care coverage.

"We see this more often than you'd think," said Danielle Roberts, co-founder of Boomer Benefits, a Medicare insurance agency.

It sort of adds insult to injury because you're finally eligible for Medicare, but because you missed a deadline, you can't enroll.
Tricia Neuman
Executive director of the Medicare policy program at the Kaiser Family Foundation

This category could include people who missed their initial enrollment period at age 65 without having acceptable health insurance (as deemed by the government) in place of Medicare but didn't realize it. Or it could be a person who didn't know they were eligible to enroll or were unable to sign up during the pandemic.

"It sort of adds insult to injury because you're finally eligible for Medicare, but because you missed a deadline, you can't enroll," Neuman said.

Copeland said the hope is that the stimulus bill would establish a special enrollment period for people who find themselves in that position so they can access Medicare right away.

Late-enrollment penalties for Part B are 10% of the standard premium for each 12-month period you should have been enrolled. For Part D (prescription drug coverage), the late-enrollment penalty is 1% of the base premium for each full month you should have had that coverage.

Increased Medicaid funding 

Roughly 12.2 million individuals enrolled in Medicare in 2018 were also enrolled in Medicaid (which supports low-income beneficiaries), according to the Centers for Medicare & Medicaid Services.

Now, with job losses continuing and household incomes under pressure, sign-ups in state-run Medicaid programs are likely to grow. States are hoping to get additional federal funding to prop up Medicaid in the face of declining state revenue and budget crunches.

"We expect to see increased enrollments in Medicaid, and we'd want to stave off any cuts to services," Copeland said. "States are having a tough time with their budgets right now, and Medicaid takes up a big piece of them."

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While expanding Medicaid is typically a Democrat-supported proposal, Copeland said that broad agreement at the state level could push the needle.

""Support may be more bipartisan than it was in the past," she said.

Federal legislation called the Families First Coronavirus Response Act and signed into law in March, boosted the federal contribution to Medicaid programs by by 6.2%. The Heroes Act included an additional bump to 14%.

Meanwhile, the National Governors Association has called on the federal government to renew its declaration of a national public health emergency, which is slated to end July 25. That expiration would end the 6.2% additional Medicaid funding now in effect. The group also has asked that the rate go to 12%.

COBRA coverage

When someone loses their job, they typically can keep their employer-sponsored health coverage for 18 months (or up to three years in certain situations) under a federal law known as COBRA. However, the ex-employee generally is responsible for the full premium, and loses out on any company subsidy.

At the same time, COBRA coverage is not considered acceptable insurance in place of Medicare for those who are Medicare-eligible. This can cause issues in terms of potential late fees if the person misses deadlines for signing up for Medicare after losing their job. And, for complicated reasons, it can lead to services not being covered and, instead, big out-of-pocket costs for the patient.

The Heroes Act called for the federal government to subsidize COBRA payments so ex-workers could afford the coverage. In the Great Recession, Congress authorized a 65% subsidy for people in that situation.

If the Senate does "move forward with subsidizing COBRA premiums, it could push people into that coverage when it might not be the best fit for them," Copeland said. "We'd want beneficiaries to have the information they need to make an informed decision."

She said her group wants to be sure that outreach and education would be part of any congressional mandate, so that Medicare beneficiaries avoid ending up in a bad situation.

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