Here Are The Three Reasons Why Medicare Is Doomed
Whatever happened to “if it ain’t broke, don’t fix it?” Despite support for Medicare ― the nation’s health-care safety net for its senior population ― many tea-leaf readers are predicting that the Trump administration intends to destroy it.
What tea leaves are they looking at? These:
1) Paul Ryan says so.
Yes, he is just the Speaker of the House and Donald Trump is the President-elect. That said, Ryan, R-Wisc., and his merry band of Republicans have been hankering to blow up Medicare for years. Trump is seen as his conduit to the cannon.
In a post-election interview, Ryan said “Obamacare rewrote Medicare … so if you’re going to repeal and replace Obamacare, you have to address those issues as well.”
And this, too, fell from his lips: “What people don’t realize is that Medicare is going broke, that Medicare is going to have price controls.”
Not much of that appears to be true, according to fact-checkers. To start, the only part of Medicare that the government pays for is Part A ― the part that covers hospital care and short-term nursing home stays. And according to the 2016 report of Medicare’s trustees, the hospital insurance coverage plan is solvent through 2028. Even after that, incoming payroll taxes and other revenue will still be sufficient to pay 87 percent of Medicare’s hospital insurance costs.
Part A is primarily financed through payroll taxes of 1.45 percent on earnings paid both by workers and employers; self-employed people pay 2.9 percent. The money goes into a pay-as-you-go trust fund, which uses the revenue raised to pay the benefits of Medicare beneficiaries.
The other parts of Medicare ― Part B, which involves seeing a doctor, is paid out of general funds and premiums, as is Part D. Thus, if costs rise, premiums can be adjusted.
Medicare going broke? No, not hardly.
2) The GOP is engaging in semantics.
You say “to-ma-to and I say “to-ma-toh― let’s call the whole thing off.” Ah, if only it were that simple.
Trump’s website and Ryan are using pretty words to sugarcoat their plan to destroy Medicare. As columnist Mike Hiltzik wrote in the Los Angeles Times, “He intends to replace traditional Medicare, an efficient program offering guaranteed treatment and featuring rock-bottom administrative costs, with a privatized program. Seniors would get a federal voucher to help them pay premiums charged by commercial insurance plans. Ryan calls this system ‘premium support.’”
It has a nice ring to it, doesn’t it?
Problem, of course, is that the amount of those vouchers wouldn’t keep pace with the rate of healthcare inflation, so eventually an ever-larger share of the costs will fall to senior subscribers ― you know, the people on fixed incomes. The first time Ryan went down this road, the Kaiser Family Foundation calculated that by 2022, his plan would make healthcare spending consume roughly half of the typical 65-year-old’s Social Security check, compared to only 22 percent under the existing Medicare system.
What words would sugarcoat “fixed income means we don’t get raises and can’t afford this?”
And let’s look at Trump’s website for a minute, where the language for the pending massacre is even more delicate: “Modernize Medicare, so that it will be ready for the challenges with the coming retirement of the Baby Boom generation – and beyond.” Modernize Medicare, like how?
When I think “modernize,” I think of advances in tele-medicine, new systems to support caregivers, sharing of medical records to eliminate redundant tests.
Somehow, I suspect, that’s not what Washington has in mind.
3) All medical providers are not created equal, but let’s pretend they are.
You’ve heard the joke, right? “What do you call the guy who finishes last in his medical school class?” The answer is “You call him ‘doctor.’”
Washington would like you to conveniently forget that.
As the dean of retirement journalists Jack Kahn opined to The Huffington Post, Medicare Advantage plans are the most popular form of Medicare. I guess we could say, they are “hugely” popular since 30 percent of Medicare’s 55 million enrollees have them. The number of individuals and families using Medicare Advantage has tripled since 2004.
And what are they exactly? Basically they are something like the old HMOs when managed care was considered to be the cure to soaring health care costs about 20 years ago, said Kahn.
That’s because they limit the patient to a certain network of healthcare providers and hospitals. Medicare Advantage still requires the beneficiary to take Medicare parts A and B (and sometimes tacks on some extra costs). But it has a cap on how much the beneficiary pays in total out-of-pocket costs—which original Medicare lacks.
“That makes it unnecessary to get a Medicare supplement (Medigap) policy,” said Kahn, “and most Medicare Advantage plans include drug coverage,” making it unnecessary to buy a Part D (prescription drug coverage) policy.
So overall, people on Medicare Advantage can save significant money over original Medicare.
There’s just one problem: You have to stay within network or pay on your own to see out-of-network providers. That can be bad news if you have a serious medical condition and are hoping to be seen and treated by a top specialist or hospital.
Kahn thinks that in the grand scheme of things, there will be a gradual shift ― or pressure, depending on semantics again ― of people in the direction of Medicare Advantage instead of original Medicare.
As pundits have said, there’s really only one answer: Just don’t get sick.
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