Minority, rural, and low-income Medicare beneficiaries make up a significant portion of people using plans targeted for spending cuts, according to a report released by the health insurance industry Thursday.
America's Health Insurance Plans, which issued the report, could use it to show Democrats that limits to Medigap policies would hit lower-income seniors.
The report uses 2010 Medicare data to find that 29 percent of African-American Medicare beneficiaries and 36 percent of Hispanic beneficiaries were enrolled in Medicare Advantage, the private health insurance version of Medicare. The report also finds that 43 percent of seniors in Medicare Advantage — which make up about 25 percent of the total Medicare population — had incomes below $20,000.
The health reform law cuts more than $200 billion from Medicare Advantage plans to help pay for the cost of expanding health insurance. Democrats say it will equalize payments across plans regionally, since some Medicare Advantage plans were getting far greater reimbursements than traditional Medicare programs. Republicans have accused Democrats of "gutting" Medicare and passing costs of the health reform law onto seniors.
The report also found that a sizeable chunk of Medigap policies — which help cover the out-of-pocket costs seniors must pay Medicare — are issued to low-income seniors and seniors living in rural areas. Fifty-one percent of Medigap policies are held by people with incomes below $30,000, and 32 percent of policyholders live in rural areas.
Limiting how much out-of-pocket spending Medigap can cover has cropped up in Congressional deficit reduction proposals from members on both sides of the aisle.