It would be grossly unfair for PPACA to impose new benefits and limits on Americans without also attempting to cope with what has become an excessive cost for Medicare.
Over the years, Medicare’s share of our population has grown, as has the number of years each beneficiary is expected to live. Of the original 1900 cohort, 45% had survived to age 65. Those that did enjoyed a life expectancy of about 12 years for men, and 15 for women. 65% of 1950’s cohort, the current one, is expected to reach age 65 this year with life expectancies of about 18 years for men, and 20 years for women. New and improved expensive medical treatments contribute their share of expense. Even with deep discounts of provider bills by the original fee-for-service Medicare, costs wildly exceed premiums collected—1.45% of income to $200,000, then 2.35% on any excess.
Obamacare has created Accountable Care Organizations, and the Federal Coordinating Council for Comparative Effectiveness Research as an attempt to deal with this shortfall. Both these organizations as explained earlier operate primarily in the interest of the Government, and influential individuals.
Here is (Let me offer) a simpler plan for managing Medicare. In the first place raise the effective standard entry age to 70. Make benefits, including drugs, subject to an annual all cause calendar year deductible—say $500 adjusted for inflation. Pay for the next $5,000 to $10,000 of reasonable, customary, and necessary care on a fee-for-service basis, at a rate of 80%. (Say $1500 to $2500 total out-of-pocket for covered charges per year.) Then pay 100% benefits for the remainder of the year. For each qualifying cohort, place a lifetime per individual cap on these benefits, with the specific amount actuarily based on the gross amount the plan contributions by the members of the cohort would have accumulated over the years at Federal long term bonds rates of return.
Allow private insurers to write plans supplementing the Medicare lifetime maximum. Their benefits would be delivered on a fee-for-service to match Medicare’s. They could be guaranteed issue, or underwritten as the various insurers saw fit. They could be attached as riders or options to plans issued for regular insurance. Their premiums would be taxed to compensate for any adverse affect they would produce on Medicare’s claim experience.
A transition period of a number of years is required. Proper evaluation of subsequent lifetime maxima is not possible for people already on Medicare. Those approaching new Medicare qualification need fair access to supplement plans, and to medical insurance extending to age 70. Medicare would continue to run deficits until these transients worked their way out. Subsequently it would be on a pay-as-you go basis.
Our government would be doing the best it could for us without having to attempt to construct a massive bureaucracy, and without having to make us or our providers jump over arbitrary hoops or crawl through capricious barrels. No one would have a right to parade a demand for government run universal healthcare, because these Medicare benefits would not be government run, and would have been paid for by those receiving them.
We, the patients, not some remote, disinterested government apparatchik putting in his time in the depths of a cumbersome and costly bureaucracy, would once again be responsible for our health care spending, and for our decisions. It’s true, we may make worse decisions than that remote, disinterested government apparatchik whose life is not on the line, but then again we could just as well make better ones based on our specific circumstances. For better or worse they would be our decisions, and we would be much more likely content with them.
No system is without its difficulties, but what I propose achieves the ends for Medicare that Obamacare desires in an honest, straightforward, and economical way.
For those of you wishing to explore this matter further, here are some web addresses.
Anthem BCBS: https://www.anthem.com/health-insurance/nevada/health-plans/
Michael Goldeen is a Group Benefit Broker with 45 years of experience selling employee benefit plans, and is an active member of the Libertarian Party of Nevada and resident of Carson City.