In this second part of our blog series on Medicare we will look at the costs of Medicare and what potential Medicare cuts would mean to the people on Medicare.

Part 2: What do changes to Medicare mean?

With an understanding of what Medicare is, the question is why is there a call for changes to the system?  As with many issues currently facing our country, it has alot to do with money.  In a post of the New York Time’s Economix blog, Uwe Reinhardt overviewed Medicare’s costs:

“In 2009, Medicare is expected to cost the federal government about $480 billion. That represents over a fifth of total national health spending on personal health care, 13 percent of the federal budget and close to 3.5 percent of the country’s gross domestic product. These outlays are financed with a combination of payroll taxes (41 percent), general tax revenues (39 percent), premiums paid by the elderly (12 percent) and sundry other sources, including interest earned on a trust fund established for the program.”

With the large health care overhaul that President Obama pushed through Congress, health care costs in general have become a main political issue.  When it comes to Medicare the rising cost of coverage that is taken on by American’s tax dollars has been a growing issue.  What however does cuts to the system mean?  Of course, this answer is not simple.

The varying coverage received by the 45 million Americans under Medicare plans makes it even harder to understand what changes to the system would mean.  Already reports have come out accusing doctors of discriminating against patients who have Medicare insurance, which pays doctors lower rates.  Increased cuts to the system could mean even lower rates and further discrimination against people under medicare plans.  Suggested changes to Medicare would also charge higher premiums to all but the poorest of Medicare recipients placing a burden on people who may not have the money to cover their care.

Ultimately decreases in rates and rises in costs for beneficiaries seem likely to lead to decreased quality of care.  As many of the health care panels in Washington have decreed it is about fixing the entire health system not just Medicare.  Changes to one part of the system and not to all of it seem to lead to further problems.  The general consensus is that quick fixes such as higher premiums and lower rates would be detrimental while long term reform could be revolutionary.

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