Medicare health care, by far, forms the crux of current patient health care delivery systems in the United States. But it would not be a travesty of truth to admit that such Medicare and allied Medicaid systems are meant for the rich segments of society and not really for the poor or marginalized classes who are still struggling to pay off their mounting medical bills without any relief from either private or public insurance schemes. Add to their woes, health care costs are on the rise and even the relief provided by schemes like Medicare is only marginal, and does not cover the full costs of treatment and medical expenses. While there has been a plethora of legislation and statutes, including bids to modernize and rationalize Medicare to suit current needs, much more needs to be done to ensure that more benefits do reach the levels of society that these are intended for. Plans for reducing the minimum age for gaining Medicare benefits from 65 years are afoot, including the introduction of new, innovative and consumer-focused special schemes. With the insurance business becoming more and more competitive due to the presence of bigger and more aggressive players, it is high time the administrators and policymakers took a good hard look at Medicare, warts and all, and suggest and implement paradigm shifts from suiting Medicare to an aging and a burgeoning number of senior citizens to ways and means by which Medicare costs could be lowered, more efficiencies are effected and overall changes are affected that could serve common good.
This paper seeks to consider the impact of financial elements on Medicare rates in the context of a United States Health Care Organization. Medicare may be termed as a kind of social health security scheme, under the aegis of a designated agency of the Federal Government meant to provide succor and benefits to aged people above 65 years, residing in the United States, or who fulfill other criteria as enunciated in the scheme documents. This could be seen as a single-payer system:
“The United States Medicare system is managed by the Centers for Medicare & Medicaid Services.” (Medicare coverage basics, 2008, para.1). The social security governance system has been vested with the task of evaluating eligibility norms to claim relief under Medicare and releasing funds to deserving beneficiaries under this Scheme. “Medicare is the Nation’s health insurance program for people aged 65 and older, some people under age 65 with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant.” (Medicare (USA), 2007, para.3).
However, it is seen that in the case of US medical care, the patients who have the funds get the kind of treatment they wish while the rest are denied medical facilities because they have no access to public medical insurance or have been denied insurance by private players. The most paradoxical aspect is that in the US context, health costs are the major expenses for the government and it spends for health care services that are conducted in the private or not-for-profits sectors. The most tragic situation in the case of publicly funded health care schemes like Medicare and Medicaid is that although the government does most of the spending, often a large portion of actual and needy patients are denied its benefits due to bureaucratic delays and administrative failures. “Because Medicare is a health care program, it is subject to the same upward inflationary pressures that are forcing many employers to drop their policies and leaving their workers to join the ranks of America’s 46 million uninsured. In fact, Medicare’s low administrative overhead and efficiencies of service have helped Medicare’s costs grow at roughly the same rate as the cost of private health insurance for the under-65 population, despite seniors’ higher need for services.” (View Point: The future cost of Medicare: Why seniors have a stake in healthcare reform, 2008, para.6). Thus it is not that suffering patients are made to bear more agonies, but it is also in terms of unproductive use of government funds that could have been put to better use.
The income and purchasing power disparities that exist in the health care segment in the US are well known. The rich can afford excellent private clinic facilities whereas the middle-class and lower rungs of society are even deprived of basic health care amenities since they do not enjoy any kind of private, or public insurance scheme.
Several components make up the rating Medicare system, and they are in terms of the following:
- Total Medicare fee-for-service reimbursement and registration for Parts A & B.
- Corresponding per capital recompense of medical costs
- For Part A- the recompense of direct medical education and indirect medical education
- Per Capital expenses with medical education and unequal sharing of expenses.
Again, it is also seen that normally when evaluation of fee-for-service for data payment rates is undertaken, the fee-for-service data is characterized and this is done by dividing the per capita amount by the average risk factor. Before stepping into the aspects of insurance, the different parts of Medicare must be judged. It consists of two parts Part A and Part b. The first part has hospital stay as mandatory for claiming benefits under this section. The following conditions are pre-requisites to qualify for benefits under this section:
- A mandatory hospital stay of minimum 3 days, being minimum three mid-nights not including discharge date
- The hospital stay should be the result of something that happened during the hospital stay or, in other words, the cause for the hospital stay
- In order to qualify for benefits under Medicare, it is essential that skilled nursing supervision should be conducted that could lay the platform for gaining benefit under this act.
- The skilled care should be for a minimum period of 100 days.
Before 1998, adjusted average per capita cost (AAPCC) was based on the five-year moving averages of local costs and this was designed to reduce the impact of such fluctuations and MA payment provisions. In the balanced budget 1997, onwards the main aspect has to been to bring down the yearly and country fluctuations.
Coming to Part B, it is believed that this part refers to some services and products not covered in Part A. This Part B is an optional clause, not a mandatory one, and maybe deferred if either the beneficiary or his/her spouse, is still earning income. This Section also includes, inter alia, diagnostic, testing, laboratory fees and nursing facilities, even medical interventions like chemotherapy, etc, which need to be paid and reimbursed. With the constitution and enforcement of the law of Balanced Budget Act 1997, beneficiaries under this scheme could prefer to gain medical benefits through non-public health insurance planning instead of original Medicare Centers.
Again, with the passing of the Medicare Prescription Drug Improvement and Modification Act during the year 2003, prescription drugs also came within the ambit of Medicare and made it more attractive and appealing to Medicare holders, and came to be accepted as the Medicare Advantage. Over time the Medicare advantage became a unique selling point (USP) and has endeared to policyholders in the USA. This is known as Plan D, and is widely used after membership in Medicare has been confirmed. “Most people will pay a monthly premium for this coverage. Everyone with Medicare can get this coverage.” (Medicare part D, 2008, para.2).
Before entering the literature review regarding the interest rates payable under Medicare it is important that the term provider under the Medicare laws are correctly defined and implemented contextually. Provider under Medicare adopts major connotation since they incur liability and dispense with payment issues in the case of Medicare. The normal procedure for Medicare is that deductions in the form of taxes from payrolls are made. Then, in the event no secondary insurance is there, the Medicare insured would be paid “20 percent of the approved Medicare amount.” (Medical service and procedures covered by Medicare, 2008, para.5).
In the case of Medicare services, it is believed that “Medicare provides coverage for the costs of medical care in the home including help with daily activities if it is part of your doctor’s orders. To receive coverage:
- The home health agency you choose must be Medicare-approved
- You must meet the qualification of your Medicare, Medicare Advantage, or MediGap plan.“ (Home health care, 2008, para.6).
The financial impacts of Medicare policy are an important decision and the best Medicare policy may be gained. Insurance companies set their own monthly premiums and the setting of prices could have a material bearing upon how much needs to be paid now and in the future. These are all factors that have to be considered before buying a policy:
- Community rated – Under this scheme, age does not change the rates while it is quite possible that inflation could increase the rate of premium but not age
- Issue age rated – Changes occur due to age differences- When the policy is being bought, the charges that could be made could be similar to what is being charged due in the neighborhood
- Attaining age rating – There is a positive correlation between pricing and age.
The research methodology that could be used for this plan could be in terms of seeking advice and counsel from owners of Medigap policies and the benefits and advantages gained from it. It could also be in terms of seeking out from members, or employees of such Medicare funds regarding the financial impacts of taking insurance in such schemes like Medicare Advantage, Medigap or others and how it impacts business prospects. Besides, it is also necessary to conduct cost-benefit schemes by which the respondents would be able to offer their suggestions and advice on the best schemes available and how this could underpin the scope and depth of a research study of this genre. Besides, it is also seen that this research methodology gained after interviews with several kinds of respondents needs to discuss the modalities of such schemes, its cost advantages and effectiveness and how this could inure for public good and bring material benefits to the respondents. “The findings provide a compelling basis for the idea that better application of best-practices in Medicare can reduce costs without sacrificing health goals. An analysis is also proceeding on the impact of Medicare Part D.” (The economics of aging the research and training portfolio of NIA/BSR, n.d., p.1).
Analysis and interpretations
The analysis and interpretation of this section would depend upon the results of deliberations and responses provided by the selected respondents. Further, it could also be possible that their responses, whether negative or positive, shall form the crux of this study and shall lay the foundation for a large number of future research on such subjects. However, the survey must e conducted well and in line with accepted financial analysis surveys. It should be unbiased or non –discriminating among respondents and should seek to foster and build the financial aspects of Medicare and Medigap schemes for common good, from both policyholders and Medicare company points of view. Besides, the survey should throw fresh light on empirical surveys on this subject, including complex financial aspects which have not been covered in earlier studies. Therefore, while it is absolutely necessary that this study should uncover the deficiencies and drawbacks of earlier akin research studies, it should also be able to uncover and throw up fresh knowledge and data on these complex insurance schemes which are however extremely popular in today’s world.
The interpretation of this survey need not only be regarding the present – it could also dwell on the future, especially about relative values and benefits of different schemes and how this could have a bearing on the financial costs of any institution. Besides, there are real concerns that with changing times and competitive aspects in business becoming more complex and demanding, the trends and future movements of Medicare shall also be subjected to various kinds of changes for good or for worse.
It is necessary that the mindset of administrators and policymakers need to make changes or even paradigm shifts to realize better cost-effectiveness and efficiencies among providers and beneficiaries. For this it is necessary to introduce Substantive changes in America’s largest public health insurance scheme which needs to be aimed at creating more beneficial schemes for poor and underprivileged health care patients and beneficiaries. Therefore the onus should shift to one wherein the total costs of such insurance schemes could be reduced rather than schemes be developed to ensure an aging American population. The main reason that is being forwarded is that total costs need to be reduced by increasing the number of clients and beneficiaries and also better facilities be adopted that could cause common good for all, providers, beneficiaries and the government through tax schemes and dole-outs.
As the deliberations in this study have proved it is necessary that the financial aspects of Medicare need to consider the larger interests of people or community members who have been left out either because they could not gain membership in any kind of insurance, either private or public and thus needs to bear their medical costs. This being the case, if the ambit and scope of Medicare could be increased to include more people, not only would the head cost come down but it is also possible that revenues may also be more forthcoming. There have been proposals to reduce the age limits from 65 to 55 years which however is still in the deliberation stage. “Allowing Americans under 65 to enroll in this program would generate the kind of competition that lowers costs and improves the delivery of care within the private sector. To be effective, however, this option must be available to Americans from day one and should be offered as an option within the exchanges, once they become operational.“ (Volsky, 2009, para.4).
Besides, there could be more attractive schemes in the offing like the present Medicare Investment that could augur well and be well accepted by the public. This is because “The cost of health care is a continuing national, state, local and organizational concern. Charted by itself, the policy response is often to seek solutions to contain those costs without regard, necessarily, to benefits potentially foregone. Results from this study suggest that, even in the face of doubtless numerous inefficiencies in the U.S. health care system (e.g. medical errors), overall health care expenditures in the U.S appeared to be a good buy.” (Luce, et al., 2004, para.1).
Home health care. (2008). Medicare.com. Web.
Luce, B., et al. (2004). Estimating the value of investment: Medicare and the overall U.S. healthcare services. NLM Gateway. Web.
Medicare coverage basics. (2008). Medicare.com. Web.
Medicare part D. (2008). Medicare.com. Web.
Medical service and procedures covered by Medicare. (2008). Medicare.com. Web.
Medicare (USA). (2007). Factbites. Web.
The economics of aging the research and training portfolio of NIA/BSR. (n.d.). Web.
View Point: The future cost of Medicare: Why seniors have a stake in healthcare reform. (2008). National Committee to Preserve Social Security and Medicare. Web.
Volsky, I. (2009). Howard Dean pushes Medicare buy-in proposal: It ‘must be available to Americans from day one’. Think Progress. Web.