Is Medicare Funding Adequate for the Care of its Population - Term Paper Example

 Is Medicare Funding Adequate for the Care of its Population? 1. Background The Medicare program was started in 1965 with the objective of providing better healthcare facilities to the citizens. People eligible for the health insurance program include those aged 65 years or older, those under 65 with certain disabilities, and people of all ages with end-stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant).1 The insurance plan includes Part A hospital insurance, Part B medical insurance and prescription drug coverage2. Part A is usually premium-free and is covered under payroll taxes. It covers “inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care). It also helps cover hospice care and some home health care”3. Part B requires the beneficiary to pay a premium and covers other services not covered under part A including doctors’ services and outpatient care. Prescription drug coverage is an insurance against the high cost of prescription drugs and the beneficiary can get the drugs at a lower cost. With soaring medical costs government plan to provide a system that ensures Medicare benefits to aged people seems like a very lucrative offer. Here I analyze various data available considering the Medicare plan and then discuss how effective the plan has been. 2. Data Presentation Medicare funding is like an insurance program where working adults pay for the medical charges of elderly. Even though it is a noble policy but with increasing medical costs and under current financial crisis, the policy seems to have run its course especially because with rising medical costs and government running short on funding, the policy might not last for long. The problem is that there is a wide notion that even though you pay your taxes with the expectation of getting benefits from the policy but eventually you might be receiving less than what you had invested. “…couple retiring in 2011 will have paid $614,000 in Social Security taxes, and can expect to collect $555,000 in benefits. They will have paid about 10 percent more into the system than they're likely to get back”4. There is a major problem with the scheme in that it lacks reliability. Most people enroll for the scheme expecting that they’re saving for their future and hence expect that they’ll get the complete return with no deductions. However, with the financial analysis pointing towards a different direction, it shatters the illusion and hence the trust. Thus, there is a marked gap between what people pay and what they receive. This lack of trust is because people believe that what they’re paying will be utilized for them while the reality is that what they’re paying is being utilized for the elderly and hence it is not possible for the government to pay back the exact amount.5 Further, with increasing cost of medical services, it is not possible to cover the gap. There is also the problem of fraudulent practices. “DOJ’s recoveries have been bolstered by the use of the False Claims Act, a powerful enforcement tool, which enables the government to seek significant damages and penalties against providers who knowingly submit false or fraudulent bills to Medicare, Medicaid, or other federal health programs.”6 There is not just the problem of false claims but also there’s the problem of false accusations. People have criticized DOJ for falsely accusing people of making false claims even though it could have been a result of minor error. “They criticized DOJ for overzealously pursuing hospitals for improper Medicare billings by conducting unwarranted investigations and demanding large penalties for unintentional errors.7” The current financial crisis is the main reason that Medicare seems to have run its course. “In January, President Barack Obama told reporters, The big problem is Medicare, which is unsustainable…This, by the way, is where there are going to be very difficult choices and issues of sacrifice and responsibility and duty.”8 As The President said the plan is unsustainable, because with the rising medical cost the plan will run out of funds and will have to rely on the payroll taxes alone which will not be able to cover the medical cost of elderly. “According to a recent CMS analysis, even if the 21 percent reduction in Medicare payments to physicians mandated under the current sustainable growth rate (SGR) formula does occur in 2010, overall payments to physicians under Medicare are expected to decline by only 7 per­cent. Between 2010 and 2018, overall payments to physicians are expected to rise between 4 percent and 9 percent annually”9. Thus, the government has to pay a major part of federal budget to doctors and physicians; it is unacceptable to the government and for the nation’s benefit. As a result of the crisis there is a decrease in the taxes received by the government hence it has led to less amount available for Medicare funding. 3. Data Analysis Considering the data available, it can be said that Medicare is not suitable for taking care of the population. The major setbacks to the plan are: current financial crisis, financial gap in what people give and what they receive, lack of funds, soaring medical costs, and frauds. Medicare doesn’t take care of outpatient doctor visits, and there is always a fear of rising premium charges. Elderly people are the ones who are in need for a plan that takes care of their medical charges when they need it the most. However, with all the problems that mark the plan it can only be said that it isn’t providing the benefits that it was meant for. It falls short in expectations because people expect it to work differently and do not understand that what they pay for is the medical bills of elderly. It is not a savings plan, but most people like to think of it as being one. So, there are propositions like a different plan under which a person should get what he paid instead of paying for somebody else’s bill. 4. Conclusion Having read the various material available regarding Medicare funding, it can be said that Medicare plan is in its last phase, not just is not enough to cover for medical cost of elderly but also it is marked by several issues that has resulted in people doubting its efficiency. Read More