Earlier this month I wrote an entry titled The Alienable Right Part I: Medicaid with the hope of educating readers on Medicaid and dispelling many of the misconceptions of that program. More broadly The Alienable Right series is intended to highlight how we have failed to completely meet the Right to Life that was listed in the Declaration of Independence, placing a spotlight on programs that are meeting this promise, defending those programs that are under attack, and promoting my views on where healthcare should be in this country. I humbly submit Part II of this series which focuses on Medicare.
I'm sure you've seen a lot of coverage in the news lately regarding Medicare and the GOP's plan to eliminate the program as we know it and replace it with a voucher system. If you have read my post on the GOP's plan you will recall that, if enacted, it would raise the out-of-pocket costs of future retirees from the currently projected 27% to 68% without addressing the rising costs of healthcare. Medicare is one of the few programs the government actually got right and it is a program that is vital to our seniors and to all of us who will become seniors.
Medicare was first created in 1965 and is a social insurance plan that is available to US citizens ages 65 and older and is funded by the payroll tax and premiums deducted from Social Security checks. It is also available to certain other groups including those who collect Social Security Disability Insurance. Medicare is broken down into different groups referred to as "parts."
Part A: This part covers hospital stays.
Part B: Covers outpatient services and items not covered under Part A.
Part C: Also know as Medicare Advantage, Part C was created in 1997 to allow seniors to have Medicare via private insurance as opposed to enrolling in Parts A and B and includes prescription drug coverage.
Part D: Created in 2006 this allows those enrolled in Parts A or B to enroll in a Prescription Drug Program which is administered by private insurance.
The intent of Medicare was to provide affordable medical care to citizens 65 or older who traditionally were unable to afford the inflated premiums and co-pays offered by private insurance. During the Kennedy administration it was noted that only 56% of seniors had health insurance, this was due in large part because of cost both on the part of seniors and insurance. Many insurers did not offer coverage to seniors or did so at unaffordable rates, this was because seniors required greater care and would not have a long life expectancy if enrolling in an insurance plan at an older age, therefore insurance companies charged high premiums to offset these costs to remain profitable. Now I normally don't stand up for private insurance but in this case I do not find them at fault for that practice, their primary goal as a business is to make a profit and seniors in need of care would have eaten away at those profits and required higher premiums. Medicare was the answer to this problem, it was a way to provide affordable insurance to seniors and ensure that more than 56% of them had access to care. Medicare is not a "free" medical program as many think, there are out-of-pocket costs including coinsurance and premiums. On average Medicare covers 80% of the medical costs of enrolees and coverage varies based on income level.
Medicare has met its intended goal, according to the Employee Benefit Research Institute Medicare covered 96.1% of the elderly in 2001 while only 0.8% were without insurance. I mentioned previously that the government actually got this program right, they've managed to insure nearly all of our nation's seniors and have done so efficiently. There are a lot of numbers floating around as to what the administrative costs of Medicare are, many site 1% or 2% but I am more inclined to believe that number is closer to 6%. But just think about that for a minute, the government has found a way to insure a large percentage of the population while only spending 6% on overhead compare to 20% or more by private insurance. Now it's not that private insurance is wasting a lot more money it's just that the business of private insurance requires more cost than the government requires. This program works, but the GOP wants to kill it.
As I've written about previously the GOP wants to take this efficient program that insures over 96% of seniors with an average out-of-pocket cost of 20% (less if enrolled in supplemental insurance) and turn it over to private insurers, the same private insurers who charged unaffordable premiums prior to the introduction of Medicare. According to the Congressional Budget Office if the GOP's plan is enacted by the time my generation becomes eligible instead of paying 27% out-of-pocket for medical care we will be paying 68% of our healthcare costs. It is unrealistic to think that entire generations will be able to save the additional half million or million dollars needed to cover these additional costs. Their plan also does not address how increases in healthcare costs will be handled, it is still open-ended as to whether or not the voucher will increase in kind. I suspect it will be up to seniors to come up with the extra dollars to cover the increased costs. It is no secret that private insurance has wanted to get their hands on seniors dollars ever since Medicare was enacted (see Medicare Parts C and D) and Republicans are ready to hand the elderly over on a silver platter, I guess that's what hundreds of millions of dollars a year spent lobbying and funding campaigns will get you.
I do believe there are ways to reduce what the government spends on Medicare and we can do so without placing the burden on the backs of our seniors. The Democrats were able to find a way to save $500 billion in Medicare costs over the next 10 years in the Affordable Care Act and did so without affecting Medicare recipients. Another proposal is just common sense and the reason it hasn't been accepted by Republicans is because the pharmaceutical companies have them in their pockets; that proposal is government negotiated prescription drug costs. That's right, as of right now the government is not allowed to negotiate prescription drug costs, the GOP made sure this restriction was included in Medicare Part D. If the government were allowed to negotiate prescription drug costs just as the VA does it would save tens of billions of dollars each year, several hundred billion in savings over the next 10 years.
Medicare is a necessary program for our nation's seniors, it literally saves lives and is one of the few ways our government has recognized that healthcare should be a right and not a privilege. We cannot allow those in government who are funded by private insurance destroy this program, we cannot go back to a time when only 56% of our seniors had health insurance. If Medicare is replaced and replaced with a voucher system I would surmise that the rate of insured would actually fall below 50% and in the end the government will be paying for the cost of those uninsured, repealing Medicare just doesn't make sense and ultimately won't save us any money.
No comments:
Post a Comment