Introduction to the Auto-Enrollment Retroactive Notice. Medicare’s Limited Income NET Program will send you a separate letter with more information and. Medicare Prescription Drug Coverage. Limited income patients stand to. Information Clearinghouse for the Medicare Prescription Drug Program. Medibank offers private health insurance options for every kind of.
Medicare is the third- largest federal program after Social Security and defense, and it will cost taxpayers about $4. Medicare is one of the fastest- growing programs in the federal budget, with spending likely to double over the next decade and to surpass Social Security spending by 2. Numerous studies suggest that about one- third of Medicare spending is wasted. At the signing ceremony for the new Medicare program in 1. President Lyndon Johnson declared, . Medicare reduces individual freedom, and its price and exchange controls increase costs and reduce the quality of medical care for all patients. The program is also subject to high levels of waste, fraud, and abuse. Polling data that show public support for Medicare do not prove that the program is a success. Such polls reflect the fact that the government has made enrollees dependent on Medicare by taking away their freedom to choose better health insurance options. It is only natural that Medicare enrollees would want to protect the only source of health insurance coverage they have left to them. Medicare reforms that allow individuals to control their health care dollars would eliminate wasteful spending, would provide enrollees better choices and better medical care, and would do so at a lower cost to taxpayers. Congress should move retiree health care from today's dysfunctional system of central planning to an innovative system based on personal savings, individual choice, and competition. Medicare vouchers and expanded health savings accounts would dramatically improve the nation's health care system. That intergenerational funding structure has set the nation on a financial collision course because the number of elderly people in the nation will grow 7. Congress created Medicare in 1. President Lyndon Johnson's Great Society agenda and has expanded the program almost continuously since. Medicare subsidizes medical care for 4. Americans who are age 6. Today, Medicare provides coverage for hospital care (Part A), physician services and outpatient care (Part B), and prescription drugs (Part D). Researchers call Parts A and B . Many enrollees augment traditional Medicare by purchasing private supplemental insurance called Medigap coverage. In lieu of traditional Medicare, about 2. Medicare Advantage program (Part C), where Medicare pays private insurers to deliver Medicare's standard package of subsidized services, as well as additional coverage. About 1. 0 percent of Medicare revenue comes from enrollee premiums, but most Medicare revenue comes from taxes on younger workers. The main funding sources are a 2. Medicare is less a . Medicare has spawned an average of one tax increase every three years for the past 4. This pyramid scheme cannot last. Medicare spending is rising much faster than tax revenue, thanks to the escalating retirement of the baby- boom generation, increasing longevity, and rising outlays per enrollee. The ratio of workers paying Medicare taxes to Medicare enrollees was four to one not long ago. It has fallen to 3. It will reach 2. 4 by 2. The gap between projected Medicare spending and dedicated revenues is mind- bogglingly large. In 2. 00. 9, Medicare's trustees reported that if Congress wanted to cover all future gaps in Medicare's finances, it would have to deposit a staggering $8. For comparison, the U. S. The Medicare financing gap dwarfs the federal government's public debt from accumulated deficits of about $9 trillion. Younger workers will face massive tax increases unless Congress cuts Medicare spending. Jagadeesh Gokhale has estimated that Congress would have to increase the Medicare payroll tax sixfold—from 2. Medicare's current promises. Martin Feldstein estimates that such a tax increase would so damage the economy that the total burden would equal nearly 2. Congress cannot solve the Medicare- financing problem by borrowing money. Government debt is just a promise to raise taxes in the future. It obliges future generations to pay the cost of today's spending, plus interest. Not only would additional government debt damage the economy and risk a Greek- style default crisis, but also it is unjust to saddle future generations with that burden. Lawrence Kotlikoff and Jagadeesh Gokhale write that debt financing of the entitlement programs amounts to . Given that state and local taxes consume more than 1. GDP, the size of government in the United States would climb to more than half of the economy. The largest factor driving that growth is Medicare, which would grow from 3. GDP in 2. 00. 8 to 9. Contrary to President Johnson's pledge, it is Medicare that is eating away at the incomes and hopes of young families. It will continue to do so unless Congress dramatically reduces Medicare spending. Even aside from the role of general inflation and demographic factors in rising health costs, there are at least four additional cost drivers built into Medicare's current design. First and foremost, Medicare allows enrollees and health care providers to spend other people's money. That all but eliminates any incentive for either party to economize and invites waste, fraud, and abuse. Researchers at the Dartmouth Atlas Project and elsewhere estimate that about 3. Medicare spending does nothing to make patients healthier or happier. That estimate does not include Medicare spending that provides some value, but whose benefits are smaller than the costs. This researchsuggests that Medicare wastes well over $1. A study by health economists Amy Finkelstein and Robin Mc. Knight found that . Congress created the huge Part D prescription drug program in 2. Other expansions occur, without any congressional action or approval, when Medicare officials deem new procedures eligible for subsidies. In 2. 00. 4, the Bush administration unilaterally announced that Medicare would begin subsidizing obesity treatments. Third, Medicare overpays for many items because it often sets prices higher than a free market would. In the 1. 99. 0s, for example, ambulatory surgical centers (ASCs) increased their productivity. A competitive market would have quickly translated those gains into lower prices for consumers. Yet Medicare took 1. ASCs. Those artificially high prices encouraged excessive use of ASC services with taxpayers footing the bill. Medicare sets prices too high in many other areas of medicine, including cardiovascular care. Fourth, Medicare's fee- for- service structure—based on price and exchange controls—encourages providers to deliver too many services because that is what the structure rewards. That fact does not imply any greediness on the part of providers. Medicine entails considerable uncertainty, and Medicare encourages providers to respond to that uncertainty by delivering more services. These factors help explain why actual Medicare spending usually surpasses projections. When Congress created Medicare in 1. Part A would cost $9 billion by 1. In 1. 96. 7, official estimates projected the cost of the entire Medicare program would reach $1. When Congress created Medicare's home- care subsidies in 1. So when the Congressional Budget Office projects that Medicare spending will grow at an annual rate of 7. Medicare grew at an average annual rate of 9. Fraud and Abuse. Taxpayers foot the bill for an alarming amount of fraudulent and improper Medicare spending. Medicare's massive size and the huge numbers of doctors and hospitals in the system make it very difficult to police. The government processes 1. Medicare claims each year by computer, generally without human eyes checking them for accuracy. The Government Accountability Office estimates that Medicare makes about $1. That figure does not include the Part D prescription drug program, which auditors believe is highly susceptible to abuse. Other estimates of improper Medicare payments are higher. Malcolm Sparrow of Harvard University, a top specialist in health care fraud, argues that estimates by federal auditors do not measure all types of improper payments. He believes improper payments account for as much as 2. Medicare. 2. 7Sparrow says that criminals can easily rip off federal health care programs by carefully filling out and submitting the proper electronic forms, because the . The Washington Post reported a good example in 2. A high- school dropout in Miami with a laptop computer single- handedly cheated taxpayers out of $1. Medicare claims for equipment and services over a four- year period. There are many ways that Medicare allows people to rip off taxpayers: . A 2. 00. 8 report by Senate investigators found that 3. Fraud appears to be an important cause of the growth in Medicare home health care spending. Medicare pays for home visits by health professionals under certain limited conditions, but patients find ways to skirt those limits. Criminal gangs have simply looted this program by submitting false claims. The costs of Medicare home health care coverage soared 4. Efforts to combat Medicare fraud frequently fail, and they can involve a vicious cycle. Cracking down on fraud may open new opportunities for fraud. And fighting fraud often involves new layers of complex regulations that may . Congress and Medicare administrators dictate prices and other terms of exchange for thousands of different medical services that Medicare purchases from about 6. These price and exchange controls fill more than 1. United States. 3. Medicare operates 1. Physician services provided under Part B, for example, use a complex pricing scheme based on the . The government assigns each of 6,7. United States and converted to dollars. The result is that the government sets about 6. Medicare. A 2. 9- member board of doctors sets the . The values are based on the inputs to medical care, such as the cost of procedures, but they do not take into account consumer- side factors, such as the quality or outcomes of procedures, or the demand. Medicare's Part A, which covers hospital services, has its own centralized pricing scheme based on the diagnosis- related group (DRG) classification system, which includes more than 5.
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