The consumer is often caught in the middle when it comes to a provider presenting a reasonably priced product while striving to stay out of the red. The American government is no different when it comes to Medicare and its beneficiaries. The Medicare program provided assistance to over 49,000,000 people in 2012,1 and this number is expected to continue to increase as Baby Boomers become eligible for the federal program. Our government is currently struggling with how to assess this growing demand with limited financial resources. In all the budget and deficit debates, it can be easy to forget the most important part of the equation which is the medicare beneficiaries.
Medicare recipients currently pay different premiums for each of the four parts of Medicare. Most individuals do not pay a monthly premium for Medicare Part A if they or their spouse have paid into the Medicare system via payroll taxes. Individuals that do not meet this criteria can purchase Part A for $441 per month. Many people pay the standard premium of $104.90 per month for Part B, but some individual’s will have to pay more if their income from the previous two years is above $85,000.2 Premiums for Parts C and D differ depending on the individual plan that a consumer decides to purchase. The four parts are designed to offer beneficiaries the most comprehensive insurance program that they can afford.
What if you can’t afford Medicare premiums and deductibles? Federal assistance, in the form of Medicaid, is available for low-income individuals. Medicare also has an Extra Help program available to assist with prescription drugs. Some states also help their Medicare beneficiaries by means of two state programs: the Medicare Savings Programs pays Part A and Part B deductibles while the State Pharmacy Assistance Program provides financial assistance for prescription drugs.3 Both federal and state governments have options available for Medicare beneficiaries who are limited by their financial resources. However, the state programs are not offered in every state and some lower-income seniors may still find themselves receiving few health care options while individuals with more money have the ability to pick and choose an insurance plan that best fits their medical needs. The federal plan that was originally created to help all seniors and other eligible citizens does not help all recipients equally.
Regardless of any underlying inequalities, Medicare is still a more affordable and efficient health insurance provider than many private companies. In fact, Medicare is viewed quite favorably among the general public. While more than half of Americans agree that the federal deficit should be corrected with a combination of increased taxes and decreased spending, 58% oppose any spending cuts to Medicare or Social Security. Three quarters said the deficit could be cut without any major reductions to Medicare.4 The overall general approval of this welfare policy ensures, to a certain degree, that the program will continue to assist the elderly and the disabled in the struggle to have affordable health care. General opinion also encourages politicians and policy makers to take a more unique approach when considering how to make the program easier on the government’s wallet without directly cutting funds.
Many different ideas are being tossed around in Congress when it comes to making Medicare more affordable. Some propose adjusting the age requirement from 65 to 67. Others argue that Medicare should be a means-tested program with higher income individuals testing out. Some also argue that spending cuts can be removed from the equation all together if the issue of Medicare fraud is thoroughly corrected. Consumers should expect to hear more about major changes to the Medicare program within the next few months but should not expect to see a decrease in their premiums or deductibles.
Medicare is a complex federal program and this complexity sheds some light onto how challenging it can be for consumers to afford health care in America. This leads to an interesting debate on how to more effectively serve American citizens. Should the focus be on reducing Medicare costs or on reducing the cost of health care as a whole? There is a growing opinion that health care is an overall wasteful, inefficient, and poor quality institution that is in need of reform. Such a reform could have huge implications for eligible Medicare beneficiaries and other Americans. Unfortunately, it is much easier for politicians and Congress to discuss how to change Medicare rather than how to improve the entire American health care system. In the meantime, consumers continue to get caught in the crossfire between the debate over Medicare coverage and Medicare cost.
Photo Credit: Medicare Prospective Payment System
1The Henry J. Kaiser Family Foundation. (2013). Total number of Medicare beneficiaries, 2012. Retrieved from http://www.statehealthfacts.org/comparebar.jsp?ind=290&cat=6&sub=74&yr=255&typ=1&sort=a&o=a
2Social Security Administration. Social Security Administration, (2012). Medicare premiums: rules for higher-income beneficiaries (SSA Publication No.05-10536). Retrieved from Social Security Administration website: http://www.socialsecurity.gov/pubs/10536.pdf
3Medicare Resource Center. (n.d.). Frequently-asked medicare questions. Retrieved from http://www.medicareresources.org/faqs/q-is-there-help-for-me-if-i-cant-afford-medicares-premiums/
4Wessel, D. (2013, January 24). Whose budget fix is more popular?. The Wall Street Journal. Retrieved from http://blogs.wsj.com/washwire/2013/01/24/whose-budget-fix-is-more-popular/?KEYWORDS=medicare