On Medicare

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Today I would like to discuss health insurance, specifically Medicare. Medicare is government supervised health insurance that kicks in either at age 65 if you are retired or younger than 65 if you are disabled. It should not be confused with Medicaid, which is health insurance provided at no cost for those who have a low or zero income and few, if any, assets. Medicaid is mostly paid for by the states. Medicare was started in the 1960s during the Johnson administration. As originally designed, Medicare was a sort of health savings account. Working people paid into it their whole career and then started using it when they retired. As retirees they still paid for it albeit at a lower rate.

Presently, Medicare, like Social Security, is in serious financial trouble and both are predicted to run out of money somewhere in the 2020s. There are several reasons for this. First of all, life expectancy has risen significantly since the 1960s. Secondly, the cost of medical care has also risen significantly as the technology of medicine has advanced. It is estimated that 90 percent of a person’s total Medicare expenditures are spent in the last year of life. Thirdly, many more people are being diagnosed as disabled now as opposed to 50 years ago. Persons declared as disabled receive both Medicare and Social Security but many of them have paid little to nothing into both benefits. Please do not misunderstand – I am not opposed to the disabled receiving these benefits, I am merely explaining the reasons why both programs are in financial jeopardy.

Medicare covers many things private insurance does not. For example no pre-authorization is needed for a Medicare beneficiary to get an MRI or CAT scan or see a specialist. There are annual deductibles and co-pays but having a secondary insurance will often cover these costs. Unfortunately managed Medicare, called Medicare advantage plans, is becoming more pervasive. Many patients are tricked into signing up for the advantage plans. They send you a flyer or call you inviting you to come to a meeting to hear how wonderful they are. They serve you coffee and a bagel and give you a tote bag. They tell you how they will save you money but they don’t read you the fine print. After signing up for these plans patients soon realize the truth of an adage – namely “there is no advantage to a Medicare advantage plan.”

Medicare advantage plans exist for one reason only – to make money. They have formularies that restrict access to certain medications, they require pre-authorization for many tests like MRIs and CAT scans, plus they often require referrals to see a specialist. These are just a few of the many restrictions that these plans have in order to turn a profit. Unfortunately, because of the rapid spread of these plans, practitioners like me are forced to accept them. My office staff spends hours on the phone and online with them attempting to get tests or medications approved for patients, often with poor results. Many times I must speak to a physician who works for the company only to get turned down. My goal is to advocate for my patient while their goal is to make money and the patient be damned. So, if you are considering signing up for a Medicare advantage plan or any other health plan do yourself a favor and speak to your doctor and his or her staff first.

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