Jeffrey Keller, a brilliant, 44-year-old gastroenterologist in central Florida, quit practicing medicine a few years ago because the reimbursements for treating Medicare patients (plus the high cost of malpractice insurance) weren’t worth the effort. Since then, countless more physicians have decided to opt out of Medicare, if not quit their profession.
Not only internists, but also specialists, either have opted out of Medicare entirely or they are not accepting patients with Medicare coverage. Reimbursement rates are too low and the bureaucratic paperwork is too burdensome, they say.
Because costs of dealing with chronic diseases of the aging make up the largest wedge of America’s health-care pie, physicians’ widespread disgust with Medicare reimbursements and increasing frustration with Medicare red tape present a crucial obstacle to the Obama administration’s drive for universal health care in America.
About 40 million people have Medicare insurance, not only those 65 and older but also younger disabled people.
Dr. Marc Siegel, an internist and associate professor of Medicine at the NYU Langone Medical Center, in a recent article in the Wall Street Journal, wrote that with more doctors dropping out of one insurance plan or another, “there is no guarantee that you will be able to see a physician no matter what coverage you have.
“Of course, we’re promised by the Obama administration that universal health care insurance will avoid all these problems. But how is that possible when you consider that the medical turnstiles will be the same as they are now, only they will be clogged with more and more patients? The doctors…will be even more overwhelmed.”
In 2008, doctors were to take a big hit – a 10.6 percent cut in their Medicare reimbursement. But Congress moved to postpone such a cut for 18 months. To cover the cost of keeping the reimbursement steady for doctors, it was to be taken from the money supporting Medicare Advantage Plans.
Medicare Advantage Plans are health plan options that are part of Medicare, enacted as part of the prescription drug plan of 2003.
Medicare Advantage Plans include: Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private Fee-for Service Plans, and Medicare Special Needs Plans. When someone joins a Medicare Advantage Plan, generally there are added benefits and lower co-payments than in the standard Medicare plan. But they may have to see only doctors who belong to the plan or go to assigned hospitals to get services. In a Medicare Advantage Plan, you may have to pay a monthly premium for the extra benefits they offer.
As for the Obama administration’s top priority – universal health care – some estimates say it could cost up to $2 trillion over 10 years.
But we are totally unprepared fiscally even for existing programs. Neither Social Security nor Medicare is ready for the onslaught of the 78 million Americans who will stop paying into retirement programs, and who instead will begin to draw on benefits government has promised them.
The first line of baby boomers began signing up for early retirement under Social Security last year. Soon the 78 million-person tsunami of seniors will expect to be covered by Medicare.
But, shockingly, no funds are stored away to keep the government’s promises in future years.
Trust Funds exist for both. But the payroll taxes supplying these Trust Funds are already inadequate.
Over the next decade, under President Obama’s budget, federal spending will increase 25 percent faster than revenue, says the non-partisan Congressional Budget Office.
But, incredibly, this is almost modest dollar-wise compared to the current unfunded liability for Social Security and Medicare. It totals $101.7 trillion in today’s dollars. This is more than seven times the 2008 gross domestic product (GDP) our total economy, according to calculations by the National Center for Policy Analysis.
These enormous figures to fund Social Security and Medicare seem too huge to even want to be acknowledged by some policy-makers.
But in just three years from now, Social Security and Medicare will need one out of ten tax dollars, John Goodman, president of the National Center for Policy Analysis points out. And just 11 years in the future—by 2020—Uncle Sam will need one out of every four income tax dollars to fund these programs for seniors.
If we continue with all other government programs in operation today and raise the taxes to pay for Medicare, plus Medicaid—the health program for low-income folks—the Congressional Budget Office estimates a middle-income family by the middle of this century will have to pay two-thirds of its total income in federal taxes.
The goal of future medical policy, NCPA’s Goodman said, “should be to generate a market in which doctors and hospitals compete” to improve quality and cut costs.” He said we will have to pre-fund the system. “This means everyone will have to start saving now for post-retirement health care,” putting money into private accounts invested in the marketplace.
Private medical savings accounts, he said could “eventually replace taxpayer burdens.”
“In summary,” he proposed, “if health-care consumers are allowed to save and spend their own money, and if doctors are allowed to act like entrepreneurs—if we allow the market to work—there is every reason to believe that health care costs can be prevented from rising faster than our incomes.”
Otherwise, prepare for the tax tsnumani.