Journalist Philip Moeller answers your questions about health, aging, and retirement. Phil is the author of the book, “Get What’s Yours for Medicare,” and co-author of “Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security.” Send your questions to Phil.
People with Medicare may be forgiven for feeling a bit smug these days. Judged by the outpouring of plans and discussions for some version of Medicare for All, it would seem that everyone wants a piece of what they already have.
There is no question that Medicare has been, on net, a huge improvement to the medical and financial futures of older and disabled people since its creation in 1965. Studies regularly conclude that it and Social Security have combined to move people older than 65 from the nation’s most impoverished to its most well-off demographic group.
No one can be denied coverage or charged more for their basic Medicare because of age and preexisting health condition. Social Security payroll taxes fund the premiums for Medicare’s Part A, which covers care in hospitals and skilled nursing facilities. The premium for Part B — for doctors, outpatient, and medical equipment expenses – is set by law for most people at only 25 percent of actual program expenses. Uncle Sam pays the rest.
These enormous subsidies are needed despite Medicare rules that set payment rates to hospitals and doctors far lower than those for non-Medicare patients. You might have noticed that these two powerful health-care providers are hardly ecstatic about expanding Medicare’s payment rates to more patients.
Congress put a cherry on this sundae in 2003 when it created Medicare’s Part D drug plans. By and large, they have helped seniors afford medications since the first private plan began insuring people in 2006.
The jury is out on whether the very convoluted rules for private Part D insurance plans are now protecting seniors from the often-indefensible price hikes by pharmaceutical companies. There is solid research evidence that Part D plans actually might have done the opposite, by guaranteeing that the government will pay the lion’s share of the costs for expensive medications.
Extending current Medicare rules to broader populations would also expose other shortcomings. Original Medicare does not cover most dental, vision, and hearing care – needs crucial to healthy aging. Private Medicare Advantage plans generally do provide such coverage, but it’s a modest benefit.
Medicare also does not cover non-medical expenses for long-term care, which is becoming the elephant in the room. Long-term care is an unavoidable crisis – both in providing sufficient care and in paying for it — for which we now have no answer. Medicaid does provide such coverage, but people need to be close to impoverished to qualify, and some states limit or deny Medicaid protection to their residents.
Adopting some form of Medicare for All without addressing these coverage gaps would simply kick the can down the road for medical needs that are exploding along with the rise in numbers of older Americans. Including them, however, is simply not affordable based on the current way we pay for such services.
Federal spending on Medicare, Medicaid, children’s health and the Affordable Care Act health exchanges exceeded $1 trillion last year, according to the Congressional Budget Office. It projected that these costs would double to more than $2 trillion by 2028.
Sharply reducing medical costs or limiting care to some populations are the only tools available to provide the expanded care promised in Medicare for All plans. Right now, there is little incentive for lower prices from within the health care industry.
All the major players – health insurers, hospitals, doctors, drug companies and equipment suppliers – oversee businesses that are based on earning percentages of revenues that must rise for their bottom lines to flourish. These players are powerful, often have demanding shareholders on Wall Street, and are not likely to willingly join the ranks of nonprofits.
Employers who fund health insurance programs are a major exception here, which helps explain why they are behind much of the push for health pricing transparency, reductions in unneeded care and accountability.
The most disruptive force in health care today is perhaps Walmart, the world’s largest employer with roughly 2.2 million workers.
Along with several other large employers who self-insure their health care plans, it is aggressively seeking out high-quality and reasonably priced health providers and directing employees toward them. Private health insurers are often bypassed in such a system.
This often includes flying employees across the country at company expense to get superior care at a price that saves money, even including the travel expenses. In doing so, these employers are identifying what needs to change to make health care work better for all of us.
By the way, Walmart is only doing here what it has always done – identifying better ways to do things, using scale and efficiency to suck costs out of a process, and emerging more profitable and larger in the process.
I’m betting that Walmart would hardly be seen as the poster child for Medicare for All. But if we want to expand health care while improving quality and reducing its cost, I would draft them for my dream team.