Seniors in the United States soon will have to make tough decisions about what they can afford to pay for the basic health-care services if insurance premiums continue to rise as much as 20 percent to 40 percent.
Lawmakers should take a look at why the cost of "medigap" insurance is rising nine times faster than the increase of Social Security benefits. Companies that offer the insurance to cover medical costs not paid by Medicare should hold down the cost of premiums or face some type of regulation to protect seniors from exorbitant rates.Medicare premiums and deductibles also are rising and may go up even further with congressional cutbacks proposed for next year, putting seniors living on limited incomes in a precarious position.
Medicare Part B leaves recipients paying 25 percent of the cost of doctor visits, hospital outpatient service, laboratory work, equipment and supplies. Premiums on Part B are scheduled to rise 3 percent.
Part A deductibles for hospital stays - the amount the patient pays for the first 60 days - will rise $24 to $760 in 1997, with the cost of the next 30 days at $190 a day and $380 a day for the next 60 days after that.
Elderly Americans can easily accumulate hundreds of dollars in medical bills for common chronic ailments and thousands for emergencies. To help cover those costs, nearly three-fourths of American seniors pay for medigap insurance.
But the astounding increases in premiums is threatening the peace of mind and well-being of those seniors.
In California, for example, the premiums charged by one of two companies that provide 50 percent of medigap insurance for its basic plan rose 37 percent from 1995 to 1996 and premiums for its most popular plan increased 39 percent, to $1,161 a year.
At that rate, the average Social Security beneficiary spends two months of benefit payments on medigap insurance alone.
Government figures show costs of federally funded medical care rose only 3 percent in the fiscal year that ended Oct. 1, and other reports show reductions in health-care inflation in recent years. With medical costs growing at a slower pace, it seems ironic that insurance premiums should be going up as much as 40 percent for those least able to pay.
Some insurance companies are taking advantage of seniors' needs and lack of competition in the market to force huge increases on their vulnerable clients. As Congress studies changes in Medicare, it should consider the total cost of health care for seniors and whether insurance companies should be encouraged to become part of the solution rather than part of the problem.