Saturday, July 05, 2003
MEDICARE AND MEANS TESTING
Different Medicare drug benefit / reform plans passed the House and Senate last week and are headed to a conference committee. They have different limits in coverage and deductibles. Both will greatly change the way Medicare is funded and run. I haven’t seen much on any increase reimbursement to physicians, however. If the payouts to physicians, hospitals, pharmacies or “private insurance plans” cannot keep pace with expenses, providers will start to opt out of the system. Many physicians are refusing to see Medicare patients or cutting back on their Medicare practice because it is not economically feasible for the to do so. The same can be said for “Medicare HMO”’s that are getting out of the business.
But do all seniors need a drug benefit? Under the Senate version everybody will get the same level of assistance, regardless of income, thanks to Senator Kennedy(D.MASS)
The benefit levels are:
HOUSE: 80 percent of a person's drug costs up to $2,000 a year, after payment of a $250 deductible paid for by the government. No further benefits would be paid until costs reach $4,900 for the year.
SENATE: Half of the drug expenses would be paid after a $275 deductible, to a maximum of $4,500. The individual would be on the spot for all of the drug expenses until they reach $5,800. The government would pay 90 percent of drug expenses above costs above that amount.
So what is so bad about means testing that the senior Senator from Massachusetts, the AARP and labor unions are against it? Why have they killed the idea in 1997, 1999 , and 2003?
THE REPUBLICAN VIEW: They view it as a tax increase on well-to-do elderly.
THE DEMOCRATIC VIEW: They feel all seniors should be treated fairly and that initiating means testing would diminish widespread support for Medicare.
I can agree with the republican position on its’ face more readily than I can the democratic position. Why is that? Well, let’s take a look:
FAIRNESS: If the democrats are so concerned about the well-to-do seniors why don’t they let them keep more of their income? Given the percentage of income taxes paid by those making $50,000 or above (scroll down), wouldn’t those people make out better keeping more of their money from the tax man than having the government pay for their prescription drugs under the plan outlined above?
SUPPORT: I think this is where the rubber meets the road. The fear would be similar to the ones about privatizing social security. That is, those who could afford their own drugs and be ”means tested” out of a drug benefit would be reluctant to pay for someone else’s. Don’t think this could happen? Lets look at school taxes. Those are taxes collected on property to support public schools in one’s community. There are multiple “tax credits” given to elderly people to offset those taxes they pay. (here,here,and here) This is done since the elderly “don’t have children in school”. How long do you think that it would take before well-to-do seniors would object to the increase of premiums to subsidize drug benefits? Remember Dan Rostenkowski being chased down by seniors angry about premium increases in 1988?
I think that Medicare is broken and needs to be fixed. It needs to be less complex and needs to reimburse physicians fairly. I feel that if we are going to keep the system then some sort of means testing will have to be added. A prescription drug benefit is nice, but if you can’t find a physician to accept you as a Medicare patient, what’s the use?
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Different Medicare drug benefit / reform plans passed the House and Senate last week and are headed to a conference committee. They have different limits in coverage and deductibles. Both will greatly change the way Medicare is funded and run. I haven’t seen much on any increase reimbursement to physicians, however. If the payouts to physicians, hospitals, pharmacies or “private insurance plans” cannot keep pace with expenses, providers will start to opt out of the system. Many physicians are refusing to see Medicare patients or cutting back on their Medicare practice because it is not economically feasible for the to do so. The same can be said for “Medicare HMO”’s that are getting out of the business.
But do all seniors need a drug benefit? Under the Senate version everybody will get the same level of assistance, regardless of income, thanks to Senator Kennedy(D.MASS)
The benefit levels are:
HOUSE: 80 percent of a person's drug costs up to $2,000 a year, after payment of a $250 deductible paid for by the government. No further benefits would be paid until costs reach $4,900 for the year.
SENATE: Half of the drug expenses would be paid after a $275 deductible, to a maximum of $4,500. The individual would be on the spot for all of the drug expenses until they reach $5,800. The government would pay 90 percent of drug expenses above costs above that amount.
So what is so bad about means testing that the senior Senator from Massachusetts, the AARP and labor unions are against it? Why have they killed the idea in 1997, 1999 , and 2003?
THE REPUBLICAN VIEW: They view it as a tax increase on well-to-do elderly.
THE DEMOCRATIC VIEW: They feel all seniors should be treated fairly and that initiating means testing would diminish widespread support for Medicare.
I can agree with the republican position on its’ face more readily than I can the democratic position. Why is that? Well, let’s take a look:
FAIRNESS: If the democrats are so concerned about the well-to-do seniors why don’t they let them keep more of their income? Given the percentage of income taxes paid by those making $50,000 or above (scroll down), wouldn’t those people make out better keeping more of their money from the tax man than having the government pay for their prescription drugs under the plan outlined above?
SUPPORT: I think this is where the rubber meets the road. The fear would be similar to the ones about privatizing social security. That is, those who could afford their own drugs and be ”means tested” out of a drug benefit would be reluctant to pay for someone else’s. Don’t think this could happen? Lets look at school taxes. Those are taxes collected on property to support public schools in one’s community. There are multiple “tax credits” given to elderly people to offset those taxes they pay. (here,here,and here) This is done since the elderly “don’t have children in school”. How long do you think that it would take before well-to-do seniors would object to the increase of premiums to subsidize drug benefits? Remember Dan Rostenkowski being chased down by seniors angry about premium increases in 1988?
I think that Medicare is broken and needs to be fixed. It needs to be less complex and needs to reimburse physicians fairly. I feel that if we are going to keep the system then some sort of means testing will have to be added. A prescription drug benefit is nice, but if you can’t find a physician to accept you as a Medicare patient, what’s the use?
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