Recent Medicare Developments

The majority of citizens in the United States, age 65 or older, rely on Medicare as their primary source of health insurance. In addition, there are numerous individuals on Social Security disability who are also eligible for Medicare. Because Medicare has become politicized, it is difficult to distinguish exactly what changes are in store for recipients of Medicare and their providers.

Medicare Going Broke
Seventy-five percent of Medicare recipients participate in original Medicare, or government-run Medicare, while 25 percent have enrolled in Medicare Advantage Plans. These plans are private Medicare insurance plans that are reimbursed by the government. While there are differences in opinion on how Medicare should be funded, there is common agreement the program is in trouble; this is because it costs too much. Individuals presently on Medicare spend far more than what they have contributed during their working years. Healthcare costs are rising rapidly. Not only that, there is extreme waste taking place. Of the $500 billion Medicare spends annually, 20 to 30 percent may be wasted on unnecessary diagnostic tests. There are also 1.5 million baby boomers signing up for Medicare every year. These developments have contributed to make the future of Medicare one of the most important economic issues for the country.

A Bleak Future for Medicare Advantage Plans
The proposed reductions in government payments for Medicare Advantage Plans are estimated to be approximately $11 billion under the Affordable Care Act. These plans are essential to individuals who are under sixty-five and on disability, for Medicare supplemental plans are not offered to those under sixty-five. United Health Care, an insurance company that offers Medicare Advantage Plans, states it will abandon many of the Medicare Advantage markets because of the new cuts in reimbursement. It is estimated that 14 million people are presently on Medicare Advantage Plans.

Changes in Medicare
CMS intends to lower fees for imaging. This applies to fees paid for multiple cardiovascular and ophthalmology diagnostic services provided to the same patient on the same day. The first diagnostic test would receive full payment, but additional services would be decreased by 25 percent. The American College of Cardiology President, William Zoghbi, M.D., has stated that the proposal would damage patient care. The different tests ordered by physicians are pieces to a puzzle that enable them to come to a diagnostic conclusion. Under the new rules, Medicare paycheck changes are dependent upon the medical specialty. Primary care physicians will receive an increase in payment by 7 percent. On the other hand, radiation oncologists will see a drop of 14 percent in their payments. Unfortunately, Medicare patients are at a time in life when specialists are needed because of the complex medical problems they encounter.

Opinions on Changes
Sally Pipes, president of the Pacific Research Institute, says there’s no question the government will be putting more controls in Medicare spending. She states the result will be rationed care for the elderly and long waiting lines. She also states that one in three new Medicare eligible patients are having a difficult time finding a doctor because of the low payment physicians receive from CMS.
Karen Davis, president of the Commonwealth Fund, believes that Obamacare will strengthen Medicare for its beneficiaries. She believes it will extend the fiscal solvency of the program and bring about changes in the health care system that will deliver better access and improved quality of care. She mentions the reduction in costs for prescription drugs and expansion of coverage for preventative care such as annual exams, mammograms, and colonoscopies.

There is no doubt Medicare is changing. Will the changes be for the better, and will Medicare continue to exist as we presently know it? Will there be improvements in coverage or long waiting lines and rationed care? As usual, the best advice is to follow the money. Funding for Medicare is in jeopardy, and its future will ultimately depend on the ability of government and private groups to develop innovative solutions to fund the program.