U.S. Medicare supplemental coverage linked to higher spending

MINNEAPOLIS, May 12 (UPI) — Supplemental insurance coverage for those on Medicare was associated with significantly higher rates of overall spending growth, U.S. researchers say.

Ezra Golberstein of the School of Public Health at the University of Minnesota in Minneapolis, Kayo Walsh and Michael E. Chernew of the Harvard Medical School in Boston and colleagues said lowering both Medicare spending and the rate of Medicare spending growth was important for the nation’s fiscal health.

The study, published in the journal Health Affairs, found supplemental coverage made healthcare more affordable for beneficiaries but also made beneficiaries insensitive to the cost of their care, thereby increasing the demand for care.

“Ours is the first empirical study to investigate whether supplemental Medicare coverage is associated with higher rates of spending growth over time,” the researchers said in a statement.

“Specifically, employer-sponsored and self-purchased supplemental coverage were associated with annual total spending growth rates of 7.17 percent and 7.18 percent, respectively, compared with 6.08 percent annual growth for beneficiaries without supplemental coverage.”