Options in the Medicare Crisis…

Analysts are saying that limiting the spending growth for Medicare in the US healthcare arena is in general much needed to cut future deficits and debts.  Deficit reduction talks led by Vice President Joe Biden have recently focused in part on Medicare.

Options in reducing Medicare spendings are as follows:

Privatize the Program…
Republicans in the House are really rooting to phase out the traditional fee for service Medicare Benefits and create this voucher like system that Ryan has proposed.

This particular proposal will shift the risk of rising healthcare costs from the government to the seniors of our country.  Higher deductible plans and co pays in private plans would encourage most seniors to seek cost effective care.  With the higher costs, most people would be forced to go without much needed care.

Recent polls show that this proposal is very unpopular among many voters.  Obviously independents and seniors.  The proposal however has helped Republicans lose a seat in Tuesdays special election in upstate New York.  Democrats stand strong in their oppose on the idea and will likely use it against Republicans in next years congressional and presidential elections.

Expand Payment Board Authority…

Obama’s healthcare overhaul last year created a new Independent Payment Advisory Board to help rein in Medicare spending.  This helps in the event that the costs exceed a growth rate target.  The recomendations will go into effect unless Congress acts.

The panel cannot propose premium increases, quality of care, or benefit reductions.  But the panel can cut costs.  However, this idea is still very unpopular.

Republicans did not like the idea of the creation of this advisory board.  Democrats do not like it either.  Hospitals and other healthcare providers are very skeptic as well.  Congress is unlikely to go along with expanding its authority.

Reduce spending for prescription drugs…

Medicare has a huge purchasing power to negotiate lower drug prices with this.  Democrats like this, but Republicans say it would be the same as imposing government price controls.

The Medicare drug program is provided mostly through private part d plans.  The only other option is to create a government run plan for beneficiaries.  Democrats support the idea but Republicans oppose it tall, arguing that this would impose price controls and shift costs to the private sector.

Update on Medicare’s fee design and cost sharing….

By updating the Medicare fee for service design, would encourage patients to seek more cost effective care.  Beneficiaries would have to pay more out of pocket expenses going this route.  If we cap those expenses it would help build public support for such a plan, as the current plan does not have a cap for out of pocket expenses.

Most seniors purchase Medigap policies privately to cover the costs not paid by Medicare basic benefits.  Some budgets have proposed forcing those plans to impose a deductible before the supplemental insurance benefit would kick in.

The argument here is the share costs to patients.  This will indeed save Medicare money by discouraging uneccesary tests and visits to doctors.  Medigap plans are very popular and the proposal will very likely meet resistence in Congress.

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Posted by johnna on May 26 2011. Filed under FINANCE, HEALTH, Health Insurance, HEALTHCARE, RECENT NEWS. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry