Medicare Supplemental Coverage: Medigap and Other Factors Are Associated with Higher Estimated Health Care Expenditures

A letter report issued by the Government Accountability Office with an abstract that begins "GAO's analysis of the Centers for Medicare & Medicaid Services' 2010 Medicare Current Beneficiary Survey (MCBS) showed that estimated average total health care expenditures were higher for beneficiaries with Medigap or employer-sponsored coverage than for beneficiaries with traditional fee-for-service (FFS) Medicare only. While estimated average expenditures were lower for beneficiaries with Medicare FFS-only, those who were enrolled in Medicare's Part D prescription drug program had higher average health care expenditures than those without Part D. Although some research has found similar patterns of higher health care expenditures for those with supplemental coverage, other studies have found that certain characteristics, such as health status and age, may influence the decision to purchase supplemental coverage, which could provide a partial explanation of the differences in expenditures. Furthermore, some studies suggest that increasing cost-sharing for those with supplemental coverage could decrease the utilization of (and associated health care expenditures for) certain types of health care such as physician visits, but increase the utilization of (and expenditures for) other types of health care such as inpatient hospitalizations.