By MARK ROSENBERG M.D.
During the long debate about healthcare in 2009, a constituent famously told a U.S. Senator, “Keep your government hands off my Medicare!” This exposed a misconception among those Americans who don’t think any government program can be any good. Since they love Medicare, such Americans reason that the Federal government must not be in charge. But they’re wrong. The Medicare program is administered and funded by the U.S. government.
Medicare is 50 years old this month. It’s appropriate to celebrate by taking a look at just what the Medicare program has become and what it has accomplished. Despite the criticisms by many, including members of my own profession, and despite repeated attempts by Republicans to gut the program, Medicare has achieved its intended goals. Medicare ensures access to healthcare for the program’s elderly and disabled beneficiaries and protects them from financial hardship.
To understand the importance of Medicare, it is important to return to 1965, when the program was enacted. At that time, half of American seniors over the age of 65 were without health insurance; many were underinsured; and seniors paid over half of healthcare expenses directly out of pocket. The result was that over 20 percent of seniors lived below the Federal poverty line.
Today Medicare covers 55 million Americans, representing 17 percent of the population, and it is expected that by 2030 80 million Americans will be covered by Medicare. Yet that success has been accompanied by a cost that continues to increase as both the numbers of seniors and the complexity of their illnesses rise.
One point of legitimate controversy is the administrative costs of Medicare. While the actuarial cost is approximately three percent, compared with upwards of 20 percent in many private insurance plans, there are questions whether spending more on Medicare might actually save the program money in the end. For example, additional upfront expenditures could address more effectively some of the concerns related to Medicare fraud, which is costly to the program. And paying for more effective disease management programs would mitigate end-of-life expenditures. With increasing burdens of chronic illness among the Medicare population, cost of end-of-life care is certain to be one of the big issues as Medicare enters its next 50 years.
One more thing. Since the passage of Obamacare (the Affordable Care Act, or ACA), the law’s opponents, i.e., Republicans, have claimed that Obamacare threatens the viability of Medicare. The claim is, to put it bluntly, false. In fact, the ACA specifically prohibits cuts to guaranteed Medicare benefits.
Here are some of the specific facts:
First, Medicare is not part of the Federal Marketplace and is not purchased on the individual state health insurance markets. Just as it was before Obamacare, enrollment in Part A (hospital and post-hospital benefits) does not require payment of any premiums.
Second, Medicare coverage has improved since enactment of the Affordable Care Act. Medicare now covers most recommended screening, including colonoscopies and mammograms. In addition, one wellness visit per year is included without charge, although not a physician visit.
Third, the Affordable Care Act increased prescription drug benefits under Medicare and provides that the “donut hole” that led to high mid-year drug costs for many seniors will be eliminated by 2020.
And fourth, for those physicians and clinics that participate, Obamacare makes improvements in care coordination. This feature is especially important to seniors with chronic conditions.
Another important benefit of the ACA is that taxation of certain very high premium health plans, with the revenue earmarked to Medicare, will allow Medicare to remain financially solvent until at least 2029.
Happy 50th Birthday, Medicare.