The Medicare Trust Fund Will Run Out of Money in 8 Years. So, Lets put More People into the Program?

By Jill Serbousek

The news coverage on Healthcare reform and Medicare can be very confusing these days. The current administration continues to tout Medicare as a model for reform. Then other reports discuss the fact that Medicare cannot be sustained without the help of the private insurance industry, who supplements a percentage of the Medicare bill. In the same Chicago Tribune article that reported the grim news about Medicare’s impending insolvency, I also found this quote: "Medicare is central to the effort to promote high-quality, affordable healthcare for all Americans," said Health and Human Services Secretary Kathleen Sebelius, a member of the Social Security and Medicare Board of Trustees.

Here are a few of my questions:

1. Does Medicare really provide high-quality care? Compared to other countries, the answer is most likely YES. Compared to private insurance? Doubtful. Medicare pays a pre-negotiated “flat fee” based on a Diagnostically Related Group or DRG. So, if you were having surgery, the hospital and surgeon will get a fixed amount to care for you. This means that they will work hard to make sure that the cost of your care fits into that fixed/flat payment. Would your younger, non-Medicare, friends receive the same care? Maybe, maybe not. Since there is no flat fee to work with, the doctor may be more willing to utilize newer technology, in many cases, more current standard of care. Even if you pay more for your Medicare coverage, as do patients who are in a higher earning category are required to do, your care will be dictated by the same pre-negotiated flat fee for your condition/procedure. In fact, those patients will pay 2 to 3 times the amount in the Part B premiums than their lower earning counterparts, for the same care. For basic healthcare needs, Medicare is probably adequate in quality. Not sure that I would characterize it as “high” quality, knowing that the flat fee forces a rationing of technologies utilized.

2. Does Medicare provide “affordable” care? It depends on who you listen to, and who you are talking about. The Sebelius quote implies that Medicare provides affordable care, so much so that it should be offered to “all Americans.” She is most likely referring to the affordability to patients. However, there are reports that estimate up to 89% of Medicare recipients have a supplement because it’s commonly known that Medicare will only pay for about half of a retiree’s healthcare costs, leaving large gaps. So, who is Medicare affordable and cost-effective for? The government? It appears that way since they are using the program to pay for only half of the participants needs.

3. If 89% of Medicare participants need a Medicare Supplement to pay for up to half of their healthcare costs, and Medicare is going broke, how does it make the program a great “model” for reform? This is the big question. I’m still doing research. Still trying to figure out why the politicians think that expanding Medicare or coming up with a Federal Health plan is a good idea. Once thing I am sure about, my confidence in the success of a federal plan is low…..

Resources worth reading:
http://newsblogs.chicagotribune.com/triage/2008/09/medicare-2009-p.html

http://www.online-health-insurance.com/health-insurance-resources/HFHC/content/medicare-supplements.htm



About Jill Serbousek:
Jill has been a marketing executive in the Medical Device industry for the past 20 years. First at Johnson & Johnson, then at Medtronic’s Spinal and Biologics business. She is a recognized expert, writer and frequent speaker on both web marketing and social networking in healthcare. Jill lives in Memphis, TN .

Link: http://www.healthandsharing.com/