General Question

wundayatta's avatar

What's your understanding of why Medicare is a big deal?

Asked by wundayatta (58663points) November 19th, 2010

Do you know what Medicare is about? Do you know who benefits from it? Are you aware there is a problem with it? If so, what is your understanding of that problem? Do you know what solutions have been proposed? Do you know what those solutions might mean for you? What do you think should be done to address the problems?

A lot of questions, and no doubt, not explained very well, but I want to know about people’s awareness of the issues here and what they would like to do to address those issues.

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14 Answers

zenvelo's avatar

Medicare is the government managed healthcare plan for retirees. Most retirees lose their health insurance when they stop working, so this is the only affordable alternative. Society felt, back in the 60s, that retired people on limited or fixed incomes should have the dignity to have their health care needs met without becoming bankrupt.

Medicare is supported by payroll taxes, somewhere around 1.45% (that may be an old rate).

The problem is that the for-profit health industry costs continue to escalate much faster than inflation, and thus Medicare costs continue to grow at an alarming rate. The Health Care Reform should help reduce the overall costs.

A huge opposition to Health Care Reform came from those who have Medicare, and do not want anyone else to receive an equivalent benefit.

wundayatta's avatar

@zenvelo You think that the people who receive Medicare are jealous of anyone else getting what they get? Why?

zenvelo's avatar

I am just reacting to the hordes of seniors that came out against Health Care Reform, who quite vocally stated the government had no business in health care. It’s been the irrational paradox of the last two years: “the government should stop giving entitlements to everyone else but me.”

Cruiser's avatar

It is one of the most abused systems in our Government. Fraud and mismanagement is costing us billions and billions of dollars.

“Hospital care associated with adverse and temporary harm events cost Medicare an estimated $324 million in October 2008.” That is ONE month!!

To give these figures an annual context,
“3.5 percent of the $137 billion Medicare inpatient expenditure for FY 2009 equates to $4.4 billion spent on care associated with preventable medical events with in-patient hospital care.”

wundayatta's avatar

@Cruiser Do you think it is possible to eliminate the fraud and abuse? If so who would be able to do that?

YoBob's avatar

Why is it a big deal? Well, because a very large number of Americans have spent their entire working lives paying into the system with the understanding that when they reach retirement age the system would take care of their medical needs.

What’s the problem? Now they have at last reached their golden years and are finding out that they do not have anywhere close to the coverage they were led to believe they would have.

What are the proposed solutions? Well, there are a number of them ranging from taxing the hell out of those working for a living to privatizing the whole system.

I think that @zenvlo’s statement about huge opposition to health care reform being a result of medicare recipients not wanting others to receive similar benefits is totally false. If anything the objections of those on medicare are concerned that what little benefits the system that they paid into all of their working lives will be reduced even further. IMHO, those fears are justified as these people have been around the block more than once and are quite familiar with the type of shell games politicians tend to run.

Cruiser's avatar

@wundayatta From what I read, I do think there could be a lot of it prevented. The system is very large with lots of opportunities for abuse. As with anything that is free to the beneficiaries, they have little incentive to report abuses or not abuse it themselves. Doctors reimbursements for services is so lean and mean it invites them to squeeze the system. But I do not know much at all of how it really works and I am eternally biased against hope that any government run program will ever be close to efficient and fiscally responsible.

GracieT's avatar

I can offer another point of view about Medicare. Although I’m only 40, because of my brain injury, Medicare is the only insurance I will be able to get. I paid into Social Security, but wasn’t really able to work much because I was in college at the time of my injury. (I was 22 years old.) As a result of my injury I will never be able to hold a real job (although I would love to!) My medication costs over $650 for every three months alone, and my doctor appointments copay’s are easily over$150 a month. I’m only 40, but my medication needs change every few months, and will continue to do so the rest of my life. I am bipolar and depressed also, and have had to go inpatient in psychiatric hospital’s twice already. I don’t know what the future holds, an so I need the security of Medicare. So even though it hurts to say it, I count on having Medicare, and will for the rest of my life.

YARNLADY's avatar

Medicare is the service that pays for my unemployed son’s family medical needs as well. The babies receive their shots, well baby exams and dental care through medicare and medical.

The way to fight fraud is to pay for more screeners and follow up visits. It seems strange, but true, you need to spend more money to save money.

Flavio's avatar

Let’s see. your question is very broad. Understand that anything I write is a superficial cartoon of a very complex system. Let me give some broad brush strokes and we can refine specific questions later.

First, what is MEDICARE. In a few words, medicare is the health insurance program offered by the federal government to individuals over 65 years old and to a few other categories of folks who are too sick to ever qualify for private insurance, such as renal patients on dialysis. @GracieT mentioned above she qualifies because of a brain injury. Perfect example. Medicare can be roughly divided into 4 parts (A-D). Part A is hospital insurance. It is automatically given to any senior over 65. It covers a certain number of days at a stretch at a hospital, any and all hospital costs. I believe, although I may be wrong, that this period is 180 days. After 180 days, Medicare benefits would have to be extended with help of the hospital OR the patient would have to be discharged or readmitted for another pay period. This is a critically important part because hospital costs are brutally expensive and without this, likely most seniors in the country would be forced into poverty. Part B is roughly outpatient insurance. Seniors have the right to purchase this from the federal government. It covers many, but certainly not all services. For example, a big lacking problem is hearing aids and eye glasses. Part C is an alternative to Part B. It is AKA “medicare advantage” and is managed by the private insurance industry. The idea was that the more efficient private sector would provide a more robust coverage package for less money. The opposite proved to be true because it is a myth the private sector is more efficient than government. Medicare advantage turned out to be more expensive and lead to worse outcomes than medicare B. It is also WAY less administratively efficient. Part D is the Medicare Drug Program that came into being under Bush II. It is entirely managed by the private insurance industry with public funding. It is a mediocre service in terms of outcomes and a bad service in terms of efficiency. It is a windfall for big pharma and the insurance industry. In 2008, the US spent approx 2.3 trillion dollars in healthcare. just over half was spent by the govt and the biggest piece by far of the govt pie is medicare (the other pieces are medicaid, the VA, indian health services, public employee health benefits).

Who benefits? Anyone over 65 and individuals with qualifying conditions who otherwise would be driven into poverty by healthcare costs. Private insurance companies and big pharma benefit over parts C and D.

Problems and solutions. There are many many many many many problems. Some of the biggest ones in my opinion. I will number the list.
1. this sequential approach to health insurance drives up the cost to medicare. since employer-sponsored health insurance knows that it will not have to pick up the tab for old age, there is an active dissincentive not to promote prevention and primary care. The majority of consequences for not investing in primary care and prevention are paid for by someone else – medicare. Makes sense? If we had a single payer system (ie. Medicare for everyone, not just seniors) the incentives would be different.
2. Medicare pays by procedure or intervention. For example, if you come to the hospital with appendicitis, the hospital can bill for each “intervention” it does to you, including placing an iv, each medication, etc. There is an incentive for healthcare providers to “do” as much as possible to make as much money as possible. I’m a doctor and sometimes i take an ER shift. I’ve had supervisors tell me, “oh this person has medicare, why don’t you get an MRI too”. If Medicare gave a global payment or if it paid for results, people would get a lot less unnecessary care. Hospitals would be a lot more in the red though which is a whole other problem.
3. Medicare reimburses less than private insurance. This creates a disincentive for profit-oriented docs or health systems to see medicare patients. A BIG problem is that Medicare is supposed to reduce physicians reimbursement by 20% in order to reduce costs. If this happens, it will be hard for physicians to see medicare patients because the reimbursement will not cover the operating costs of the practice. Congress has to delay this frequently. Extensions to this measure has already happened 3 times this year. A permanent solution is needed, but it is not clear what that solutions is.
4. Healthcare costs are going up and this stretches the ability of medicare to provide comprehensive coverage. The American public is loath to have a conversation of what should and should not be covered. a LOT of money is spent in the last 4 months of life in heroic measures that add little to the health and dignity of the patient. We could save a lot if we simply don’t do as many heroic end-of-life measures that really don’t add that much to the overall outcome. However, just bringing up the topic makes cynical politicians howl about killing grandma. It’s very frustrating we cant even have this critically important national conversation without political fear-mongering. To give these political vipers some leeway, it’s no question that Americans are very afraid of facing our own mortality and not fearing death. Unfortunately, we all die some day.
5. a made-up problem is that medicare will go broke. This is something people who hate govt services love to scream about. Medicare has as much chance of going broke as the military. It’s a public service and we (the people through our duly elected representatives – cough* cough*) determine how much of our taxes go to this service. If we choose to support it because we find it valuable, it will not go broke. If we decide to spend our money on another war or more tax cuts for the ultra-wealthy, then we many not have the money for medicare.

Personal opinion.
What we need is health reform that goes much further than what Obama and the dem Congress pushed through. We really need a single, comprehensive, federal program that insures everyone in America for all their medical, mental, and dental care needs. We need to extend Medicare to cover everyone from birth to death. This would allow us to take all the waste out of the system and focus on evidence-based strategies that would give us the best value for our money. The best way to save medicare is to make it the only insurance in the land.

plethora's avatar

Not negating any of the posts above relating to the good that is accomplished in their lives as a result of medicare. @GracieT is a perfect example.

The primary downfall of medicare is this. Anytime you give anything away free, you must have very tight cost containment in place from the get-go. Medicare has never had an effective cost containment system in place, and that is a sellout on behalf of all the people it serves to make promises and then not be able to afford to deliver on those promises.

Within the last 90 days I read (and please don’t ask for “proof”. It was a passing news article and I couldn’t find it if my life depended on it.) I read of an 84 year old man who had cancer and who received a new medication that would extend his life for maybe two years. He admitted up front that he would not have availed himself of it if he had had to pay for it. It was not worth the price to live another two years. BUT medicare paid the whole price. So why not. He took it. You and I paid for it.

I have a unique perspective. I was around in 1966 when medicare was passed, was an adult, and my father was in the major medical insurance business. He sold major medical insurance to individuals and the policies were denominated in terms of room cost and the size of the deductible. At that time, it was not unusual to buy a $40/day policy with a $1000 deductible with a 20% copay of all covered expenses over the first $10,000, with 100% of the first $10,000 covered. Hard to imagine that this fully covered a person prior to 1966 and at a reasonable price.

My Dad told me when medicare was passed that the cost of medical care was going to rise like a rocket. Did it ever. Within two years he was selling policies in the $100/day range. He had never even heard of $100/day policies two years before. And it continued to rise by about $50/day every year thereafter, until he died in the mid 1970’s (at age 52). That’s when I stopped following it. It was still rising.

Because I was in the health insurance business also for a couple of years in 71–73, I had access to statistics on the rising cost of health care. I recall one amazing chart that showed the cost of health care continuing on a fairly stable level with a slightly upward tilt thru the 40s, 50s and 60s..until 1968 when health care costs turned up like a rocket taking off. That was the effect of Medicare on health care cost. I also had an uncle who was a hospital administrator and he confirmed what I was seeing.

Now, I’m at the other end of the cycle. Turned 65 recently and there is no choice on medicare. You get it whether you want it or not. (Incidentally, I still work and pay into both medicare and SS.) However, I get to go to the pharmacy and pick up medications that cost $250/mo and I pay 7 bucks. Good deal for me? How bout you? You pay the rest.

Obamacare is gonna be more of the same, except worse. Once again, no cost containment.

ETpro's avatar

@Flavio I was all primed to write about this, but read your great answer and you’ve covered it so well. I’m on Medicare. At my age, even though I am in remarkably good health, private health insurance would cost me thousands of dollars a month. A good policy was nearly $2,500 a month 4 years ago when I last checked. Most seniors are not anywhere near as healthy as I am. There is no way any but the wealthiest would have any care other than emergency room visits which all you insured people would end up footing the bill for.

The Doc is so right. We need to switch from private insurance that’s employer sponsored to single payer—Medicare for all, cradle to grave. Our healthcare outcomes are among the worst in the developed world, yet we pay a far higher percent of our gross domestic product for healthcare (17%) than the best systems. France is rated #1 and their single payer system, covering all, costs 11.2% of their GDP.

Having to pay for insurance for workers is also hurting the competitiveness of American business in a global economy, where virtually no country that competes with us imposes such a burden on their companies.

Cruiser's avatar

I heard the Governor of Minnesota yesterday on the radio rail on his experiences so far in dealing with Medicare. He said it took “an act of Congress” to actually get the big pharmas to reveal the true costs of pills to his Medicare enrollees. Long story short….patients lets say are charged $5.00 a pill and Minnesotat Government is Rebated $4.00 per pill! He was outraged and petitioned the Big Pharmas to just charge the $1.00 per pill!! It is saving his constituents MILLIONS just on prescriptions costs alone! The pharam industry and the entire medical industry IMO is nothing more than a gun to your back big shake down just because they control the government with its massive campaign contributions.

Pawlenty exposed this ruse and IMO it is only the tip of the iceberg!

GracieT's avatar

@ETpro covered it well. We do need to switch to cradle to grave coverage for all. I would love to switch to generics for all of my medicines, but if I did, it would actually end up costing more because I would likely (according to my neurologist, and I believe him!) wind up in the hospital because of a seizure. Then also one of my medicines is unavailable as a generic. I tried a few of the other medicines available in generic forms. None of them worked, so again I would probably end up in the hospital. I think that most of the problem is allowing business to control medicine. As their focus is the bottom line the quality of care suffers. I think that many of the ways things are done in the US are shortsighted and by being focused on the bottom line we are actually hurting ourselves because of having to do things over and over instead of once, or also having to spend more money because the result of doing things cheaply is having to correct our mistakes.

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