The future of Medicare. We are all in this together!
When one asks me about Medicare and the costs, they are surprised that there are even costs! The Medicare trust fund is financed by Medicare taxes paid in 2020 by 178.9 million people and through premiums paid by beneficiaries, primarily through Medicare Part B . According to the 2021 Annual Report “Status of the Social Security and Medicare Programs”, it is critical that we all focus on reducing Medicare costs or else soon the program will be forced to reduce benefits, reduce provider reimbursement, and/or raise revenue by means of generating more tax revenue or increasing Medicare premiums on account of it not being fully funded. It is also good to point out that we do not have to wait and see what happens when we can all act now. Since 2006, enrollment in Medicare Advantage, or Part C, has steadily been growing, with nearly half, or over 28 million, of all Medicare eligibles in 2022 being enrolled in the program. This means that more than half are still enrolled in Traditional Medicare Part A and Part B. According to a National Bureau of Economic Research study published in 2017, the Medicare Advantage program is attributing to 25% less cost on health care than the Traditional Medicare program. Why is this? Well…to explain in simplest terms, the Medicare Advantage program is a joint effort by the Federal Government and the private sector, or health insurance companies, to provide high quality health care while at the same time guarantee savings to the federal government. Medicare Advantage plans have a contractual agreement with the federal government to administer the Medicare benefits in exchange for a capitated payment per member per month enrolled. Medicare Advantage Plans can integrate quality programs through its provider contracts, care and disease management programs, drug utilization management tools, and rich benefit structures to make this happen while Traditional Medicare is limited in these areas, hence the common term of fee-for-service under Traditional Medicare: you go, they pay, no incentives, no extras, no questions asked. It is essentially up to the Medicare beneficiary to decide if Medicare Advantage is right for them and up to a provider to decide whether to contract. But why not? Doctors and providers also play a big role in saving the Medicare Program! Many people ask well, my doctor is not contracted or prefers I stay with Traditional Medicare because Medicare Advantage may not approve services, they do not pay the doctor what he/she expects to be paid, or well, I travel and need wider access to care. While that may be true and understandable, Medicare Advantage plans, who also employ doctors and other medical professionals follow established clinical guidelines when reviewing care and treatment plans, and some also provide plans with traveler benefits. Consider it as a check on the provider because there is no guarantee that they all practice in the same way nor do they all offer the same treatment plan that may be the best for the beneficiary. Plans also offer PPO (Preferred Provider Organizations) with out-of-network benefits where the provider does not even need to contract and still get paid. In a nutshell, consider Medicare Advantage for your Medicare needs. You might just save your country in doing so!