Many seniors in this country qualify for significantly discounted health care due to their enrollment in the Medicare program. In addition, they are able to get all the coverage they need by buying a Medicare supplement and an additional drug plan. Neither of these are required, but many seniors have chosen to purchase them anyway since premiums generally totaling less than $150 per month — and sometimes nothing at all — allow them to minimize their co-pays or even reach near 100 percent coverage.
This health coverage is generally much better than what is available for individual or employer plans for the under-65 market. However, with political and economic turmoil dominating the news almost every day, a question on many seniors’ minds is whether original Medicare A (hospital) and B (doctor services) programs will stay in place. What do baby boomers have to look forward to when planning for Medicare
Proposed Changes
During the 2012 presidential election, certain proposed changes to Medicare by Governor Romney received widespread media coverage. What many individuals still do not realize, however, is that Medicare will most likely change substantially even now that President Obama has won reelection. The reality is that the nation cannot afford to maintain coverage as is.
Age Impact
Proposals to change Medicare will protect those closest to turning 65, the age when people typically qualify for coverage. Most discussions assume that today’s 55-year-olds will be covered under the current plan. Those younger, however, will see changes in the future.
These planned changes can be quite confusing, but you can keep these main points in mind:
Retired people who earn more than $85,000 per year individually, or couples who earn $170,000+ per year, already pay higher Part B premiums. The qualifying age limit will likely be raised to 67 and higher for individuals who are significantly younger today; the exact details have not yet been determined, although this change will not affect people who are anywhere close to the current retirement age.
People just joining the Medicare program would see a few additional fees. Part B premiums will rise further in income-based shifts for many Medicare recipients. The details of many of these proposals are still in discussion, with specific that have yet to be hammered out.
Related Considerations
Some feel that if people do not enter the Medicare program until age 67, they may require more care and ultimately end up costing the government more. On the other hand, waste and fraud are serious issues for Medicare right now.
While it cannot be easy to keep track of 35 million recipients and their providers, the reality is that the private insurance firms that run the Medicare Advantage plans are not plagued with the same levels of waste and fraud. A business will always look at these issues with more scrutiny than the government simply due to self-interest. This inefficiency has provided additional fodder for those opposed to maintaining the status quo
The Affordable Care Act
Most people expect any plan Pres. Obama approves to do everything possible to ensure that current seniors keep the healthcare with which they are familiar. That said, $500 billion is to be taken from Medicare over 10 years to help pay for the Affordable Care Act of 2010 (also known as Obamacare). The details of how this will happen, and its impact on Medicare coverage, are not yet certain; that it will have a major financial impact that must eventually be passed on to Medicare recipients, however, cannot be denied
Long-Term Care Insurance
A proposed new long-term care plan (the CLASS Act) has been tabled because the cost and provisions that would allow for adverse selection simply will not work economically. After all, if you could buy fire insurance on your home after it caught fire, why would you bother carrying it ahead of time? This is a huge issue as long-term care is the main cost of Medicaid. This insurance is expensive, and it is not covered by Medicare
New Treatment Models
Cuts in Medicare are happening all the time, primarily as reductions in reimbursement rates for doctors and hospitals. The medical world is worried that it will be driven into the red with all the cost cuts Medicare now requires.
Pilot programs are already in effect to try to deal with the problem, many of them moving from a model in which fees are charged for medical services to a coordinated care model under which the medical community is reimbursed for healthy outcomes rather than for visits and procedures.
These programs are testing ways to make quality healthcare less costly, while encouraging people to live healthier lives that emphasize prevention and reduce the likelihood of required medical treatments
Many Medicare changes currently being proposed will not be implemented until some years into the future. The important thing to understand, however, is that Medicare will change somehow — and the result likely will be higher costs — no matter which politician or party is in power. The alternative is the eventual insolvency of the Medicare program.