Keeping track of one’s own health care spending is much too complex for the average American. My wife has a PhD and decades of handling our family’s medical expenses. She reads everything that the government and insurance companies and medical providers send us. She checks the figures against each other. She studies health care issues online. She believes she is just now getting the hang of Medicare.
I got a letter from my insurance company last month. “Dear Valued Policyholder”, I was told about this year’s changes in Medicare and how the insurance company was changing our policy.
On January 1, Medicare increased its deductibles across a range of services. For hospital stays under so-called Part A coverage, a variety of deductibles were increased 2.2%. For outpatient services, including doctor visits, medical supplies, home health, and preventive services, categorized as Part B, the deductible jumped 10%.
Nearly everyone on Medicare goes to see a doctor sometime during the year, so that increased Part B deductible affects nearly everyone, but it’s not very high. We now have to pay the first $183 in medical services and supplies one time this year, instead of $166, so each of us Medicare recipients will pay an extra $17. That bit of tinkering with cost means a lot. Spread out over the 54 million people on Medicare in the US, one out of every six Americans, that increase will save Medicare nearly one billion dollars.
Medicare is an insurance bargain. Payroll taxes paid over our working lives by employee and employer cover Part A until we die. That’s worth about $5000 per year for the average Medicare recipient.
Part B costs are partially covered by continuing Medicare premiums. Unless a family makes over $170,000 per year, annual premiums are about $1450. The average annual benefit is $5300. How is that possible over the long term? Medicare Part B, our ordinary use of doctors and medical services as outpatients, is mostly paid by the federal budget, our tax dollars at work, $192 billion in 2014. So federal budget decisions are of key importance in paying for our health care.
Medicare is a remarkably efficient system compared to private insurance. In 2014, Medicare spent $605 billion in benefits, and $9 billion in administrative expenses. That’s a very low proportion of spending on administration, much lower than private insurance companies.
Although exact numbers vary from source to source, a hospital stay averages about $2000 per day and the average stay is about 5 days. Someone my age can expect a 5-day hospital stay about every 6 years. That means at least a $10,000 expense, for which Medicare picks up everything over $1300.
An older friend of mine whose health is not good spent 3 months in hospital last year, which according to these averages, would total $180,000. Medicare would pay over 90% of that, leaving only about $11,000.
These numbers are crude averages. Every hospital stay is different. But they show how much difference Medicare makes in our lives.
Republicans say that changing the health care system and how we pay for our own health is the most important issue we face. On the campaign trail, they encouraged voters with ridiculous ideas, like keeping government out of Medicare. They go on and on about waste, but never can identify it. They boast that they can deliver more services at less cost. They categorically assert that Obamacare is a failure, without noting any of the unprecedented improvements it has made in our national health care system, notably covering millions of Americans who never had insurance.
Here’s what that means. Those without insurance were one-third as likely to spend a day in the hospital as those with Medicare or Medicaid. It’s not because Medicare patients needed more care. That difference means that insured people get the care they want and need, while the uninsured do not.
My insurance company sent me a second letter at the same time with a proposal. If I would join a network of hospitals and doctors that they have set up, they would waive my Part A deductible if needed. This network has no hospitals in my county, meaning I would have to change every doctor I use, and a trip to the hospital would mean driving miles past the fine hospital in my town.
Critics of Obamacare rant and rave about how people are forced by government to change doctors. It’s my insurance company and others like it who try to make deals so we use the doctors and hospitals they want.
Now my government wants to revamp a system which is crucial to the financial and medical health of all of us over 65. Despite years of complaining that Obamacare was a failure, Republicans have no plan to replace it, and some estimate it will take years to develop.
Let’s keep this government out of our Medicare.
Published in the Jacksonville Journal-Courier, January 17, 2017