 |
 |
|
|
More than 38 million Americans currently are covered by Medicare, the federal entitlement program providing health insurance to people ages 65 and older. Medicare spending now makes up nearly one-fifth of all health care spending in this country.
Experts predict the Medicare trust fund will be bankrupt within seven to 10 years -- years before the first Baby Boomers enter retirement and become eligible for benefits.
Many politicians and older adult organizations argue that all senior citizens deserve Medicare because they paid into it.
But a University of Wisconsin-Extension health policy specialist says that argument clouds the real issue of whether this country can continue to afford to provide health insurance to all older adults when many younger adults who pay taxes to support Medicare don't have health insurance.
"Right now, the arguments about Medicare pit one age group against another," said Roberta Riportella-Muller.
"It's true that older adults have paid into the program, but the distribution of benefits is never across the board. It really depends on how sick you are. Someone who is very sick may use many times the amount of services that he paid for, while another person may never get back what he paid in."
Riportella-Muller said three issues directly influence the Medicare system:
Riportella-Muller said when Medicare was passed in 1965, it was part of a larger plan to provide health insurance for all Americans. It was a compromise to target first the most needy -- those over age 65, 30 percent of whom lived below the poverty level. Medicaid targeted low income people in general and provided a supplement to the poorest people over age 65.
Because Medicare has always been an open-ended, fee-for-service program, controlling costs is difficult and creates biases. Since administrators cannot control the number of people served or the volume of use, they rely on controlling the costs paid for each service. In this system, rural providers are reimbursed at lower rates than urban providers.
The current system also has no incentives for individuals to be cost-conscious. Each person can choose what types of services he or she wants, knowing Medicare will pick up the tab. In comparison, working people usually make health care choices, at least in part, based on affordability.
In today's effort to reform Medicare, Riportella-Muller said politicians have not addressed important questions about possible limits. Instead, they try to find cost savings in the current system.
Riportella-Muller said some important issues need to be considered if the goal is to keep Medicare financially viable.
They include:
(written July 1995)
|
||||
