The Surprising Pros and Cons of Medicare

The Surprising Pros and Cons of Medicare

Medicare may be a big concern in some circles.

What is the true status of Medicare? Is it good, bad, or somewhere in between? What would happen if Medicare was eliminated?

HealthMarkets discusses some pros and cons of Medicare.

Pros of Medicare
Medicare Provides Coverage to those that Wouldn’t Have Coverage
In many senses, Medicare does “work.” because of the program, many aging adults are ready to receive coverage once they otherwise wouldn’t be ready to afford it. before 1965, when Medicare was created, around 9 million older adults didn’t have health coverage. That number is significantly above the 508,000 seniors who were uninsured in 2018. Medicare also covers many younger Americans with disabilities who, otherwise, wouldn’t have healthcare.

Consider the implications if Medicare didn’t exist. Older Americans, who typically need the foremost medical treatment, would find themselves paying exorbitant medical costs directly out of pocket. the entire paid per annum would be staggering, presumably exceeding their annual income.

Individuals with disabilities would be totally hooked into their caretakers, who may or might not be ready to afford medical aid.

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Medicare is beneficial because it covers numerous people.

Medicare Costs little or no monthly
Generally, Medicare enrollees qualify for free of charge Part A but must pay a little, out-of-pocket amount monthly for Part B. This number is estimated to cost around $135.50 per month. once you compare this to the out-of-pocket cost of operations, prescriptions, and other associated costs, the savings are huge.

Medicare Advantage Plans Offer Additional Coverage
More and more Americans enroll in Medicare Advantage plans annually, and enrollment is predicted to stay growing within the future. In fact, enrollment was at 22 million in 2019, quadrupling from 5.3 million in 2004. Part C enrollees made up 34% of the 64 million Medicare recipients as of 2019.

MA plans offer beneficiaries an alternate thanks to getting Medicare benefits through plans sold by private insurance companies that contract with the Centers for Medicare & Medicaid Services (CMS).

You get all the Medicare program benefits of Part A hospital insurance and Part B medical insurance, together referred to as Original Medicare*, once you enroll partially C (Medicare Advantage). Plus, Medicare Advantage plans may provide additional benefits (dental, vision, etc.) at a minimal cost.

These services are essential to older Americans who would suffer otherwise.

Medicare Has Led to Prescription Innovations

The inception of Medicare created a huge marketplace for drug companies. Suddenly, many Americans had access to prescriptions they wouldn’t have had otherwise. When pharmaceutical companies saw the untapped potential within the Medicare market, they began investing billions of dollars in the development of medicine tailored specifically for seniors.

As John Holohan, a fellow at the Health Policy Center at the Urban Institute, notes, “A market began for drug companies and medical device manufacturers; once you have a market willing to buy [products], it’s worth making the investment.”

The addition of Medicare Part D prescription plans and Medicare Advantage prescription Plans—both sold through private insurance companies—also gave Americans wider access to prescription medicines.

Medicare beneficiaries have had access to those plans since 2006, and enrollments have increased per annum since. In 2006, 22.5 million (52%) people on Medicare were enrolled partially D compared to 43 million (72%) in 2018, consistent with the Kaiser Family Foundation. With many Americans receiving Medicare prescription benefits, this might have given pharmaceutical companies more opportunities to develop drugs for this market.

Medicare Has Resulted in Increased Medical Standards

With the creation of Medicaid and Medicare, Congress created a group of standards for hospital enrollment within the programs. As time went on, the govt became more involved in overseeing these standards and now requires public reporting on things like hospital infection rates and readmissions.

This public accountability forces hospitals to perform due diligence in ways they could not otherwise.

As Karen Davis, director of the Roger C. Lipitz Center for Integrated Health Care at the Johns Hopkins Bloomberg School of Public Health, notes, “When hospitals determine they aren’t nearly as good as other hospitals, they get serious about improving. once they determine it’s possible to possess lower rates of infections, as an example, they struggle to seek out out what good practices are and follow them to urge good results.”

Cons of Medicare

Medicare Costs an enormous Amount to Administrate

In 2018, Medicare spending totaled $731 billion. Currently, that’s approximately 15% of the general federal budget. That number isn’t expected to urge smaller, with many estimating that the share will go up to around 18% over the subsequent decade.

When you consider that this staggering amount might be spent on other valuable programs, like education, eliminating poverty, mental disease cures, and social justice, it a minimum of causes you to question the general efficiency of the program.

Poor Health Can Actually Cost More
The Kaiser Family Foundation says that those that reported themselves to be in poor health and on Medicare had out-of-pocket costs 2.5 times above the healthier beneficiaries.

It’s somewhat hard to gauge what this statistic means as long as self-reporting isn’t always reliable, but it does raise questions.

Granted, Medicare does offer a big number of free preventive programs to enrollees which will hamper on health problems. Many of the individuals on Medicare suffer from preventive conditions (particularly before the implementation of ACA).

Hospital Stays Still Cost tons
Even for those enrolled in Medicare, hospital stays can still be extraordinarily expensive, easily running into the thousands. This highlights several issues.

As noted, many of these on Medicare suffer from preventable conditions and are hospitalized for those conditions. This places an increased burden on hospitals, which may then approach the costs across the board for all patients.

Additionally, because many Medicare enrollees are in a low-income bracket, they can’t afford these stays, placing a crushing burden on them and putting the hospital in a difficult spot.

While Medicare certainly helps those that are struggling medically, it also creates a big strain on the general healthcare system within us.

Older Enrollees See Costs Skyrocket

Medicare enrollees 85 and older spend 3 times more on healthcare than those aged 65 to 74,” consistent with a Kaiser Family Foundation report. In some ways, this could be expected because more medical issues arise as an individual gets older.

However, it also reveals that Medicare doesn’t adapt well for the oldest adults. a very efficient system would take the increased costs under consideration and spread those across all enrollees.

Medicare Attracts Fraudulent Doctors
In 2017, we charged 412 doctors with medical fraud, amounting to $1.3 billion. Unfortunately, much of this fraud was connected to the opioid epidemic currently happening within the country. because the ny Times reported, “Nearly one-third of the 412 charged were accused of opioid-related crimes. The health care providers, about 50 of them doctors, billed Medicare and Medicaid for drugs that were never purchased; collected money for false rehabilitation treatments and tests; and gave out prescriptions for cash, consistent with prosecutors.”

In addition to the Medicare funds lost through fraud, the govt must also employ a big task force to research potential crimes, adding yet more expenses to the Medicare program.

Medicare Costs Taxpayers an enormous Amount
In 2018, an astonishing 36% of Medicare funds came from payroll taxes. With the present Medicare rate set at 2.9% (split between employers and employees) — and a further 0.9% for those making quite $200,000 — this represents a big amount of cash beginning of every paycheck.

While it’s certainly understandable that Medicare funding must come from somewhere, it raises the difficulty of whether private insurance companies might be more efficient in terms of funding their programs.

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