Medicare has long been one of the “third rails” of American politics. It’s a program that has weathered the test of time, and it has contributed to the stability of individual families and the economy at large. Medicare provides health insurance for seniors over the age of 65 and people with certain disabilities. But increasing healthcare costs are making the program unsustainable, and Republicans are proposing a number of changes to contain expenses and make it more flexible for the needs of modern healthcare delivery.
Tackling the High Cost of Care for the Elderly
The costs related to healthcare, in general, have skyrocketed due to greater use of technology and more types of skilled care by health professionals. Expenses involving the care of the elderly have increased even more than among the general population because this demographic tends to require more use of healthcare services. For a number of years, Republicans have been intent on tackling the high cost of Medicare coverage. Speaker of the House Paul Ryan has led recent initiatives to revise the current Medicare system. Currently, Republicans have control of both the Congress and the presidency, and they see an opportunity to privatize more of the costs of Medicare in hopes of containing costs and sustaining the program well into the future.
A New Medicare Plan for the Nation’s Future
Republicans’ vision involves a defined contribution approach that provides vouchers for seniors to use to purchase private healthcare plans for their care. As a result of this approach, the traditional “fee-for-service” option of traditional Medicare would be phased out in order to manage costs more effectively. Proposed changes would affect those under the age of 55.
Raising the Age of Medicare Eligibility
One of the basic tenets of the Republican plan for Medicare is raising the age of eligibility from 65 to 67, a difference of just two years that may make a big difference in long-term funding of the program. The argument is that seniors are living and working later than they did when Medicare was first created in 1965.
But with Republicans’ current commitment to defunding the subsidies that make healthcare affordable under the Affordable Care Act, coverage would be very expensive for seniors in their mid-60s thanks to community rating, which allows insurers to charge up to three times more for health insurance for older customers. The idea of this potentially negative impact could stall passage of changes to Medicare in Congress unless it’s properly addressed. Messing with Medicare could be politically volatile as it’s a universally popular entitlement program.
Making It Harder to Choose the Coverage Seniors Need
For many older Americans, Medicare is already complicated enough, and a cottage industry of “Medicare advisors” has sprung up to help elders navigate the many Medicare Advantage plans as well as Part D programs that can be added to traditional Medicare. Creating a system of expanded private plans will inevitably cause many seniors to seek even more guidance for their healthcare decisions. Additional personnel to assist seniors in these periodic decisions will add to the cost of the Medicare program, possibly canceling out the savings that are expected by the changes.
Shifting More Costs to Enrollees
Another problematic area of proposed Republican changes to Medicare is the potential shift of more costs to enrollees. As traditional Medicare is reduced, privately managed plans are likely to become more expensive. Right now, Medicare Advantage plans use the cost limitations of the original program to contain payments to health providers. When these limits are no longer available for determining costs, private health insurance companies are likely to pass on additional expenses to enrollees. This would lead to higher deductibles, larger co-payments and fewer covered benefits. Inevitably, older Americans would have to tap into their life savings to make up for these expenses.
Consequence of Proposed Medicare Changes
Healthcare experts are carefully examining all the proposed changes to the Medicare program to determine what may happen in the future. The Kaiser Family Foundation has brought into focus several different issues that could adversely affect the elderly population. A voucher-style program could drive sicker enrollees into the traditional Medicare program, causing it to go into a “death spiral” of increasing costs. Changing to a privatized system could adversely affect low-income elderly, who would be forced into low-cost plans that may not fully address their needs and. Seniors may also be forced to change plans more frequently due to rising premiums and market instability
Making changes to the traditional Medicare program will involve a long campaign of education to reassure the public that the revisions will be beneficial in the long run. Because individuals have experienced concrete examples of the many ways Medicare has aided their elderly loved ones, they are likely to be suspicious and skeptical of proposed changes. Considerable thought will have to go into revising the program to ensure that any negative effects are minimized or picked up by other programs in order to satisfy Americans’ firm commitment to providing adequate healthcare for the nation’s elderly.
