Traditional Medicare - MEDICARE COST CAP ACT

[GailL1]

US Senate.gov Finance - Medicare Cost Cap Act Lowering Out-of-Pocket Costs for People with Medicare 

These Senators have gotten it written in Bill Format - so it is ready to be introduced. 

In their own words here (at the link) is what the Medicare Cost Cap Act would do.

Per these Senators in the linked article:

Background: Currently, Traditional Medicare has no limit on beneficiaries’ out-of-pocket spending, putting them at risk of confronting unlimited health care costs if they face serious illness or hospitalization. Medicare Advantage, employer-sponsored insurance, and insurance bought on the Marketplace all have annual caps on out-of-pocket spending. Americans who choose Traditional Medicare deserve the same protection. According to AARP, “Adding an out-of-pocket spending limit to traditional Medicare, similar to the one that exists for people

enrolled in MA. This change would not only help protect individuals from the risk of incurring high out-of-pocket costs but would also reduce the policy imbalances between traditional Medicare and MA1.”

I cannot find any pro or con from the AARP.org membership organization on this legislation. 

From the Senate minority leadership

DEMOCRATS.Senate.gov- 06/25/2026 - Leader Schumer, Senators Blunt Rochester & Wyden, Lead Legislatio... 

[GailL1]

ADDING TO MY OWN THREAD on the “Medicare Cost Cap Act of 2026” proposal

AARP supports the Medicare Cost Cap Act - here’s their writeup on their advocacy position on it 

AARP.org 07/17/2026 - AARP Backs Bill to Limit Original Medicare Cost 

Seems odd, I know - since as I see it, this would signal an end to most Medicare Advantage plans - and make Medigap plans pretty much one-size-fits-all since all they have to cover is $ 5000.  

I still don’t believe the figures - especially the cap - $ 5000 ????  I guess there is a reason that cost analysis don’t go hand in hand with bill introductions,

[jo85336578]

Thanks for posting this.  My first thought is that this would clearly provide protection for people covered under original Medicare. My second thought is that taxpayers would replace insurance companies in covering healthcare costs not covered by original Medicare in excess of $5,000 annually. The rational policy holder would feel less need to pay premiums with maximum out-of-pocket costs of $5,000. So my third thought is that insurance companies will oppose this legislation and I would strongly support such legislation. And AARP might have mixed feelings about biting the hand (UHC) that feeds it. My guess is that the insurance companies (and UHC is the largest) will be throwing unlimited bucks opposing what appears to be an excellent bill. What a wonderful country!

[GailL1]

@jo85336578 

Since you, to date, are the only other person that seems interested in this  - I will post some other think tank reviews that have been done on this subject - so you can see their perspective.

The Urban Institute with support from the Robert Wood Johnson Foundation:

Urban Institute.org - June 2022 - Adding an Out-of-Pocket Spending Limit to Traditional Medicare 

The current (2026) CMS dictated out of pocket limit for MA plans may not exceed $9,250 for in-network services and $13,900 for in-network and out-of-network services combined, though plans can offer lower limits than the maximum.  

 Per KFF.org -  

• The average out-of-pocket limit for Medicare Advantage enrollees is $5,421 for in-network services and $9,825 for in-network and out-of-network services combined in 2026. The average out-of-pocket limit for in-network services is higher for PPOs ($6,592) than HMOs ($4,636). Traditional Medicare does not have an out-of-pocket limit, but Medicare Advantage plans are required to cap patient costs.

This MA limit imposed by CMS rises with inflation.

So I kinda think this $ 5000 for Traditional Medicare might be too low. 

BTW, this proposed plan does widen the help that some seniors would get under the Medicare Savings Program - so more will probably qualify for this Medicare/Medicad program under this proposed legislation but maybe NOT full Medicaid benefits.  

Medicare.gov - Medicare Savings Programs 

That brings in another analysis done by the Urban Institute - 

Urban Institute.org - December 2022 - Analysis of Alternative Approaches to Increasing Part B Financ... 

They look at questions like should we cap Medicare Part B premiums at 8.5% of income?  Right now they can be raised exponentially and this is what is being used to help keep the Part B Medicare afloat (along with the IRMAA that some seniors pay and what the Treasury puts in @75% of the Part B program coverage) 

So this would not just raise what the government [taxpayers] pays in amount for Medicare but also what we as taxpayers will pay in our respective states for this MEDICAID coverage for low income senior Medicare beneficiaries. 

KFF.org also did a similar study on this out of pocket max for Trad. Medicare back in 2014

KFF.org - 02/27/2014 - Adding an Out-of-Pocket Spending Maximum to Medicare: Implementation Issues a... 

All in all - I think we are too divided to really get serious about ANY changes to Medicare for what ever the reason - Politics trump rationality - I am too old for it to matter much so depending on your age and the age of others - I would just plan, as you are doing, to CYA for the years to come.  We will continue to have the changes made by states for guaranteed issue periods and with that Medigap plan will continue to rise in cost unless we do something about the cost and use of healthcare as a  country.

[jo85336578]

Yes, we are too divided to tackle the simplest of problems, much less Healthcare which is today a broken system. Too many are uninsured; way way too many. Tackling healthcare is a tough nut to crack. But we HAVE TO!  Google "LBJ, Bill Moyers and Richard Goodwin swimming naked in the White House Swimming Pool in April 1964." It was the genesis of what came to known as "The Great Society" plan calling for Medicare, national voting rights and aid to education. It was an ambitious program but thanks to true bipartisan cooperation and DETERMINATION, the legislation was passed. Not the concept of a plan but a true plan. That's what today's problems demand. Cooperation and doing what's best for the nation as a whole. Not talk but action. We can learn from history. 

[jo85336578]

My additional thought is that this is not all that much different from a high-deductible Medigap Plan F. Higher deductible ($5,000) than a current HD - F (or HD - G)  but with the premium paid by taxpayers. But the legislation would create another full-employment act for lobbyists.

[GailL1]

@jo85336578 

I agree - not much different than a HD Medigap - just with a higher OOP deductible - but could you imagine the premiums if that deductible was $ 5000 or more (maybe we could pick our own) - 

Those that are within these plans usually end up saving money - their own money in the long run.

But for some reason beneficiaries still flock to the Medigap plans where they pay as little as possible out of their own pocket - at least until they find out that they someday may not be able to afford these lucrative medigap plans and then it might be too late for them to change.  

[jo85336578]

But because would be no medical underwriting, anyone with Parts A and B of Medicare  would be eligible to enter the proposed plan, making it so expensive to taxpayers that it would be unsustainable.