Turning 65

I have been looking forward to turning 65 for some time now.  Primarily because it means I now am eligible to receive Medicare.  To me, this is one of the single most important benefits for aging citizens of this nation.

Medicare is a fascinating program.  It is actually younger than I am, having been signed into law in 1965.  Medicare’s lineage can be traced back to the Social Security Act first proposed back in the late 1930’s, and signed into law by President Harry Truman in 1945.

Most people today don’t have the foggiest idea of how and when Medicare started.  For example, I wonder how many of you ever heard of Wilbur J. Cohen?  Those of us receiving Medicare and Social Security owe Mr. Cohen a huge thank you for his work on setting up the infrastructure that is known today as the Centers for Medicare and Medicaid (CMS).

Our country has always had an uneasy relationship with old people, and especially with older people who are poor.  While many elected officials espouse Christian values such as those shared in Biblical books of Deuteronomy, Matthew, Mark and John, and many Americans follow similar directives found in the Torah and Qu’aran, as well in Buddhist dharma teachings, the mechanics of how to care for the aged and poor remain problematic.

The fundamental question is this:  Should individuals be responsible for themselves and their welfare over the lifespan, or does society (private and government) have some obligation to directly or through subsidies, care for its members?  There is no clear agreed upon answer in the United States.

homeless-health-servicesThe uneasy compromise that we live with today is once again being challenged.  Current political leadership is encouraging the dismantling of government-administered benefits and shifting the responsibility to the private sector.  This is not new or cutting edge.  In fact, it is reflective of cultural norms that existed in pre-Colonial times here in the U.S.

Social Security Act

What is now known as the Social Security Act had its roots in various social and political movements within the United States, as well as drawing on models in place in Europe.  (For a wonderful read, check out this article on the Social Security Administration’s web page.)  When FDR signed it into law in 1935, the nation breathed a sigh of relief and began the long road to recovery.  Initial benefits were funded through collecting a percentage of workers’ salaries (Federal Insurance Contributions Act, also known as FICA).  Thus from the start, Social Security has been funded by and for workers, not by government grants or allocations.

It would take another 30 years for medical benefits to be included in the Social Security Act.  Opposition to a national health insurance plan has been there since the start.  We are a nation of contradictions.  On the one hand, we are fiercely independent and don’t want to be told who we can see for what ails us.  On the other hand, we are strongly affiliated with specific interest groups (e.g., American Medical Association (AMA), insurance companies) who lobby elected officials to obtain the best possible outcomes for those they represent.  Members of the AMA want physicians to be able to set their fees and manage their patient load without outside interference.  Insurance companies want to maximize profits for their stockholders, provide benefits at the best price, and determine who they will insure.  Others strongly advocate for a social safety net  to provide services to those who are unable to care for themselves.

Political philosophies exert influence over this discussion and frequently obscure evidence-based needs.  For example, in the 1950’s, politics was dominated by fighting Communism, and arguments against “socialized medicine” were tainted by assertions that providing benefits for all Americans would somehow be construed as socialism.  One example of slanting the argument away from “socialized medicine”, was a PR campaign funded by the AMA and presented by Ronald Reagan, when he was still actor.

Reagan-LPcover

It is interesting to listen to this today, since many of the arguments touted by present-day Republican leadership in Congress can be extracted almost verbatim from this recording.  The threat of individual decision-making being removed in favor of government-decided actions seems to continue to hold sway.

Yet the miracle remains that somehow, in spite of the frequent misinformation and logical fallacies that are trotted out on a regular basis by physicians’ groups, insurance companies, pharmaceutical lobbies and politicians, Americans are eligible to receive hospital and medical benefits when they reach 65.

Original Medicare

Today CMS administers benefits for almost 60 million Americans who are either 65 or older or are disabled.  Of these almost 40 million use Original Medicare and approximately 20 million use Medicare Advantage Plans.  Original Medicare pays hospitals (Part A) and enrolled providers (Part B) 80 per cent of the cost of services, and beneficiaries (me and you!) pay the remaining 20 per cent out of pocket.  For many, this 20 per cent is covered by supplemental insurance (e.g., United Healthcare or Blue Shield) which is purchased separately.

Medicare_Stats

Medicare Advantage Plans

Medicare Advantage plans (Medicare Part C) are newcomers to the program.  These are independent insurance plans that are purchased in lieu of Original Medicare.  Beneficiaries decline their Medicare benefits and pay premiums directly to the Medicare Advantage insurance company.  Medicare Part D is also relatively new.  This benefit covers pharmaceuticals.  It is not part of Original Medicare.

Medicare Funding and Fiscal Monitoring

Current political parlance with regard to Medicare calls it an “entitlement program.”  In fact, Medicare is paid for by people like you and me.  A portion of all employee, employer, and self-employed salaries goes to payroll taxes which are then added to the Medicare Trust Fund.  Additionally, 6.2 per cent of income taxes are deposited to the Trust Fund along with interest earned on the trust fund investments.

CMS is a huge government agency and has its own internal policing department that goes after waste, fraud, and abuse.  This is in addition to the Federal government’s Office of Budget and Management which audits all federal programs.  It cannot be denied that there are problems, however, CMS is one of the more fiscally-sound agencies around.

Medicare Coverage Gaps

While Medicare offers wonderful benefits, it is still far from universal and has huge gaps in coverage.  For example, Medicare does not provide coverage for hearing aids, glasses, or dental needs.  Frankly, this seems a bit of an oversite to me, especially since loss of hearing, sight and teeth frequently lead to poor overall functioning and a lower quality of life.

Because of how payments are structured, specialty providers such as surgeons receive much higher pay than family practice providers.  Non-physician providers such as myself, received substantially lower rates of reimbursement regardless of training or degree.  Some services such as physical therapy and occupational therapy have limits put on them.  Length of stay in skilled-nursing facilities is strictly enforced, while payment for assisted living and in-home care is excluded.  Still, Medicare provides remarkable bang for the buck, and I for one am very happy to be a Medicare beneficiary!

Thanks for reading!

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