Medicare is a huge undertaking, and it covers a surprising number of members. These six facts should impress you---and some may help you make the most of the program, too.
It’s valuable to learn a lot about Medicare so that you approach it and use it with your eyes open, making smart decisions that can benefit both your health and your wallet. Here are six Medicare-related facts that should help you better understand the government-run health care program. Many or most of them will likely surprise you, too:
- Medicare’s size. In 2016 Medicare benefit payments were $684 billion and they are projected to rise to $709 billion in 2017. That’s more than the gross domestic product of Switzerland. In 2015 Medicare spending made up a remarkable 15% of the federal budget. It also accounted for 20% of all health spending in America, as well as 29% of prescription drug retail sales, 26% of hospital care expenses, and 23% of physician services costs.
- There are more than 57 million enrollees in Medicare, as of October 2016. Considering that there are roughly 325 million people in America, that’s a hefty 18% of the population—nearly 1 in 5. Among the 57 million, more than 17 million enrollees are estimated to have signed for Medicare Advantage Plans in 2016. Medicare Advantage plans are alternatives to the “original” Part A and Part B of Medicare, offering as much coverage and often more.
- Affordable Care Act (ACA). The ACA has strengthened Medicare in many ways. It’s important to understand the role that the ACA (often referred to as Obamacare) has played in Medicare’ health—because the current administration in Washington is interested in repealing the act and replacing it with an-as-yet-unspecified alternative (at least as of this date). Here are some things to know:
- The ACA was designed, in part, to contain health-care costs that were rising at rapid rates. Data from the Kaiser Family Foundation (KFF) shows that Medicare spending grew at an annual average of 9% between 2000 and 2010, and then slowed to an average of 4.4% between 2010 and 2015. And that’s despite baby boomers starting to enter Medicare rolls in 2011. The KFF also notes, “Average annual growth in spending per beneficiary average 1.4% between 2010 and 2015, down from 7.4% between 2000 and 2010.”
- If the ACA is repealed, our government will lose an estimated $800 billion in tax revenue, according to the non-partisan Committee for a Responsible Federal Budget. However, that’s not all though: latest estimates suggest that repealing the ACA in its entirety would cost roughly $350 billion through 2027 under conventional scoring and $150 billion using dynamic scoring. Also: “Repealing the ACA’s coverage provisions would save $1.55 trillion through
2027,while repealing it’stax increase would cost $800 billion, and repealing its Medicare (and related) cuts would cost another $1.10 trillion. Repeal would also lead to a small increase in economic growth, which could produce over $200 billion of additional net saving.” Clearly, there are costs and savings via a repeal.
4.Repeal could possibly increase human costs. If the ACA is repealed, about 23 million people will lose health insurance coverage. This could lead to tough or very difficult choices for many, including the risk of financial disaster to pay for healthcare, or go without and the risk of poorer health. While the ACA has indeed introduced some new cost to the federal budget, it has also ushered in some greater financial efficiencies while covering millions of Americans. Also, per Kaiser, “Medicare spending would rise primarily as a result of repealing the ACA’s reductions to payments to providers and Medicare Advantage plans. An increase in Medicare spending would likely lead to higher premiums, deductibles, and
- It pays to use Medicare wisely. Wise use of Medicare can improve your physical and financial health. Zero is how much you pay for an annual wellness visit with your doctor, per Medicare. It’s also how much you pay when you get certain screenings, such as mammograms, colonoscopies, diabetes screenings, and many more.
- Medicare’s rating system. Medicares rating system rates services and facilities such as hospitals, dialysis centers, Medicare Advantage plans, nursing homes, and more. A
five starrating is the best you can get, but as of July 2016, when 3617 hospitals were rated, only 102 earned all five stars. For 2017, about 49% of Medicare Advantage plans with prescription drug coverage were rated with four or five stars—covering about a 68% of enrollees. The rating system for hospitals takes into account measures such as the rate of post-surgical infections and emergency room wait times. Medicare Advantage plans are evaluated on measures such as how well they’re keeping their members healthy (via screenings, checkups, and more), how well they’re managing members chronic conditions, and how good their customer service is. You’ll find the star ratings of plans available to you by using the Medicare Plan Finder at the Medicare website.
Medicare has evolved into a system of broad healthcare coverage system for seniors. The more you learn about Medicare, the better use you’ll be able to make of it, such as taking advantage of available screenings that could detect health problems before they get worse. We suggest that you stay aware of how Federal legislation evolves as Congress and the new Administration develops changes to the ACA, that may affect Medicare.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Sources: Kaiser Family Foundation, Medicare Website