Medicare premiums, saving Medicare and more; keep an eye on the real concerns

The most popular search engine referrals to this blog are related to one topic; Medicare premiums. That tells me there are a heck of a lot of us seasoned citizens spending time surfing the Internet and apparently concerned about the cost of Medicare. [Search on this blog for the many articles I have written related to Medicare]

That is quite understandable given the scare tactics being employed by politicians, the extensive press coverage and the outrageous and false e-mails that circulate on a regular basis. One relatively recent such e-mail talks about Medicare premiums in 2014 going through the roof. No doubt if you are still paying less than a hundred dollars per month for Part B and you hear that will nearly triple in a few years it may get your attention (not true by the way).

As long as the formula for calculating the Part B premium is not changed (25% of the cost and frozen for most people in years when there is no cost of living adjustment for Social Security) premiums alone are not currently the biggest concern. Of course, premiums will keep increasing because they reflect the underlying costs of Medicare.

Recent changes made by the Affordable Care Act add new benefits and thus costs that will be reflected in premiums. The legislated cuts in payments to physicians have not occurred as promised and based on Congress’s track record will not occur. Lower payments to Medicare Advantage plans result in some plans dropping the program and others trimming benefits or raising premiums. In others words, in many cases beneficiaries have paid for these cuts.

There is much talk of reigning in fraud and waste as one way of saving Medicare, but fraud and waste is not a new story. It has nothing to do with health care reform but a lot to do with the way Medicare is administered. Medicare’s much touted low administrative costs are too low to effectively manage claims thus Medicare simply pays claims as submitted making fraud that much easier and adding to costs when medical necessity is rarely questioned.

One piece of proposed legislation will eliminate the restriction on balance billing to Medicare patients by physicians [search this blog for more information]. If passed, this would encourage more doctors to drop out of Medicare and drive up beneficiary costs.

The Affordable Care Act sets up numerous programs to test changes in the way Medicare patients receive care, how care is coordinated and how that care is paid for. The law attempts to encourage groups of doctors, hospitals and other providers to establish Accountable Care Organizations (ACO) through which Medicare beneficiaries will receive their care more efficiently and hopefully less costly.  Congress is counting on these programs along with the new Independent Advisory Panel to reduce costs and save Medicare.   All these trial programs succeeding, saving money and being implemented and sustained by Congress is highly questionable.

Your greatest concern should not be your monthly premium but rather your primary concern should be the tinkering by Congress, the reliance on trial programs to control costs and the inability of Medicare to manage itself especially with the added complexities of the Affordable Care Act.

Your concern should be focused on your out-of-pocket costs and access to health care. These are longer term issues, but the simple fact is Medicare is not sustainable as it is today. Something significant must change and that means going to any doctor you like and receiving any service recommended or desired while paying a minimal portion of the cost is not going to be part of Medicare in the future despite what you hear from the politicians.

The ideal outcome is to make the health care system as efficient as possible so only the most appropriate care is provided at all times. This means both lower costs and higher quality, an outcome we all can live with…we have a long way to go.

Related articles

• Medicare reform will shift costs to Medicare beneficiaries (and everyone else) regardless of the approached taken (quinnscommentary.com)
• Why does my Medicare premium cost half of the cost of my supplemental coverage? (quinnscommentary.com)
• The Ryan plan for Medicare is already in place (quinnscommentary.com)
• President Obama’s plan to save Medicare-why you should be concerned even if you are not on Medicare, perhaps especially if you are not on Medciare (quinnscommentary.com)