HEARING - U.S. Senate Special Committee on Aging

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All Of these figures are based on 1984 data and would have to be
adjusted upward for the inflation that has taken place since that
time.
I have reviewed the Harvard report entitled "Medicare: Coming of
Age, A Proposal for Reform" and find that it discusses many avenues
for controlling Medicare costs that call for additional analysis and
possibly testing of their practicality. Here, increasing price
competition among providers might have been included.
Regarding proposed changes in Medicare's benefit structure, I
believe they may have overlooked the fact that the vast majority of
the elderly have supplemental insurance via private plans or Medicaid.
Further, their suggestion that Medicare be expanded to cover
annual physical exams should be supported by studies of their impact
on health rather than assumptions.
3
Also, the statement that private
Medicare Supplement plans duplicate Medicare benefits is false as I
stated at your hearing.
I believe their concerns regarding the viability of private longterm
care insurance are unfounded. First, their statement that
younger citizens are unwilling to purchase such insurance is not
supported by any study and is made at a time when citizens have
misunderstandings regarding Medicare benefits for this care...
Second, private plans cover home health care contrary to their
statement. Finally, the report overlooks the funding of private
insurance on a group basis which entails minimal administrative
expense.
One final observation is that the report does not make suggestions
that would help the aged file claims under the Medicare program.
From personal experience, I suspect that few of the elderly understand
the claim filing system and this creates problems for them.
One solution would be to require all providers to file the claims
for their Medicare patients.
Senator Melcher, again we appreciate the opportunity to present the
views of the health insurance industry and want you to know that you
should feel free to call on us if we can be of further service in
this matter.
028718/mm
Encls.
Sincerely yours,
Robert B. Shapland
Vice President and Actuary