Medicare, a federally supported program, was adopted in 1965 to provide health coverage and services to the elderly seniors (over 65) and disabled citizens without regard to income or medical history. Its funds come directly from federal governments and beneficiaries. Medicare revenues come from interest, taxation of social security benefits, state payments, payroll taxes, beneficiary premiums and general revenue. The government uses money generated from taxes to reimburse providers who take care of patients enrolled in these programs. Medicare consists of four parts including: A, B, C, and D. Part A is the Hospital Insurance that includes inpatient hospital care, skilled nursing facility, hospice care and limited home health services. Part B is the Supplemental Medical Insurance that covers physician services, outpatient hospital care, select preventive and diagnostic services, mental health and home health visits. Moreover, Part C is the Medicare Managed Care, also known as Medicare Advantage that provides care through local managed care plans. Finally, Part D involves the Prescription Drug Benefit. It is different from other elements of Medicare, since it s enrollment is voluntary and is subsidized for individuals with low incomes and assets.
Traditional fee for service Medicare is highest with 75% while Medicare advantage is 25% including HMOs and PPOs. Medicare accounts for 12% of the health insurance coverage in the United States. Medicare enrollment has significantly increased 20.4 million in 1970 to a high of 47.7 million in 201, and expected to reach a high of 81.0 million in 2030. Hence, the number of people Medicare serves will nearly double by 2030. Medicare also has a good percent of federal budget of about 15.1% in 2010. Not to mention, Medicare spending as a share of GDP has significantly risen the last decade. Percentage of Medicare Beneficiaries Enrolled in Medicare Managed Care has developed from 1991to reach a high of 24% in 2010. According to Kaiser Family, there are a couple of common characteristics of Medicare populations. They have concluded that major qualifiers include under-65 disabled citizens and 65+ seniors that earn annual Income below $22,000, or save below $53,000, or are diagnosed with 3+ Chronic Conditions, or poses Cognitive and Mental Impairments, or have a Poor Health. Therefore, studies have shown two-thirds of Medicare Spending Is for People with Five or More Chronic Conditions.
There has been some change in the Medicare Population with increase in number of beneficiaries while a decrease in numbers of workers per beneficiary. Although Medicare seems positive with enrollment gaining and premiums holding steady, it faces some major issues in the long run. According to the Kaiser family, Medicare faces an important challenge in providing future care without burdening and holding back the general economy. Moreover, the role and payment systems of private plans in Medicare have been a major concern. Private plans are not stable and may suddenly cease coverage. Medicare is challenged with the idea of making long term health care affordable to everyone despite the recession and increasing health costs. With regard to drug prescription, Medicare is burdened with its structure and spending. Not to mention, Standard Medicare Prescription Drug Benefit has also seen an increase in Catastrophic Coverage Limit, Initial Coverage Limit and Deductibles. Although Medicare is going broke, it has been subjected to major cuts and reductions in revenue due to the federal Deficit and the debt ceiling.
The Balanced Budget Act of1997 ensures solvency of the Medicare until 2008. Obama care is also affecting Medicare by adopting a cost effectiveness strategy and cutting down on Medicare expenditures. Medicare’s enrollments have been significantly increasing with expected 70 million baby boomers to join its ranks. This poses the question of how to provide care for these new incomers in a time of bad economy. Medicare is very restrictive and imposes a lot of rules and laws for qualifications. Therefore, members may experience difficulty getting emergency or urgent care. Also, they have to follow plan rules to get covered care and any error would disqualify a patient from receiving assistance. Since not all hospitals or physicians accept Medicare, members are restricted in their choices of doctors, hospitals, other providers, locations and outpatient care. Although Medicare saves patients money, people are still encountering high costs and additional premiums on supplemental insurance.
Hence, Median out-of-pocket health spending for the elderly and disabled on Medicare as a share of income has been rising, from about 12 percent in 1997 to more than 16 percent in 2006. There has evolved huge unexpected gaps in the Medicare coverage strategy. These gaps include incomplete coverage for skilled nursing facilities, incomplete preventive care coverage, and no coverage for dental, hearing, or vision care. Generally, solvency is a drawback to the Medicare program. Approaching that problem is a great starting point that opens doors to lawmakers to debate and solve any Medicare complications. Typical suggested solutions would be to protect the Medicare coverage, reduce costs to taxpayers, reduce deficit and promote competition. First solution would be to allow the Secretary of Health and Human Services to negotiate drug prices with pharmaceutical companies. This would save taxpayers billions of dollars annually and reduce health care costs which can be used to improve benefits for beneficiaries and reduce the deficit.
Another cost effective approach would be extending Medicaid Drug Rebates to low income Medicare Beneficiaries. Since Medicare provides the cost for the drugs to the low income dual eligible qualifiers, it would be a good solution to shift the cost to Medicaid and extend Medicaid rebates for dually eligible people. Moreover, lowering the age of Medicare Eligibility would increase revenue from younger individuals who are healthier and less likely to need the services of the Medicare program. Not to mention, proceeding with the Affordable Care Act Do is a primer in ensuring control costs, reform models, solvency of the Medicare program and protection of Medicare’s guaranteed benefits. This would be a great strategy to improve care, hold down costs for taxpayers. The ACA should put an end to paying Private Medicare Plans anything more than Traditional Medicare. Finally, providing and offering a drug benefit in traditional Medicare would increase beneficiaries’ choices and options and encourage them stay in traditional Medicare, and save money for taxpayers.
“Medicare Fact Sheets, Primers and Other Basic Resources – Kaiser Family Foundation.”Medicare Fact Sheets, Primers and Other Basic Resources – Kaiser Family Foundation. N.p., n.d. Web. 03 Feb. 2013. <http://www.kff.org/medicare/factsheets.cfm>.