Today I tried to convince Medicare to stop sending me emails that should be going to a different person. I called them on the phone and they were apologetic but they said that they cannot do anything with MyMedicare.gov accounts without the Medicare number. That is a strange way to run a web site. Since I am not interested in hacking into his account and none of his emails has his Medicare number on it, I guess I need to grin and bear it.
I was reading the latest Thoughts From The Front Line newsletter, Unhealthy, Not Wealthy, and Far from Wise, and could not help wondering whether Medicare costs more than my health insurance. My wife and I are 61 years old and our health insurance premium is $479. According to the Medicare website the 2015 “Part B” premiums is $209.80 per month for a couple earning less than $170,000. That looks nice but it is only the part of the total health care bill. According to the Medicare NewsGroup in “2011, Medicare spent a total of $549.1 billion on health care coverage for 48.7 million beneficiaries” or about $11,275 per person. This is considerably higher than what we are paying for private insurance, $4,764 per person. It sure looks like the vaunted cost efficiency of single-payer health care systems is more sizzle than steak and you have to wonder how many of these services were necessary!
John Mauldin goes on to say that Medicare costs are going to get much worse.
In July, the Medicare trustees issued a report estimating that next year’s Part B premium will have to rise 52% in order to keep the system solvent. That’s right, 52%. This will be an increase of $50 to $175 per month, again depending on your income. So much for 2% inflation.
Some supporters will agree that Medicare has not done a good job of controlling costs but then say at least it is not dysfunctional. I think they are sorely mistaken. Nothing describes how dysfunctional Medicare has become than Health and Human Services Secretary Sylvia Burwell pledging that 70% of Medicare enrollees will be exempt from the rate increase. Now I am beginning to dread the day I become eligible for Medicare because health care costs are growing faster than Social Security Cost of Living Adjustments and I will be part of the 30% who will bear a disproportionate burden of the cost increases. Someday we will have to start thinking outside of the box about cost cutting because this is not a revenue problem. Both the single-payer health care systems and the health insurance exchange rely too much on wealth redistribution. Without intelligent cost cutting to temper our health care abuses and inefficiencies, the system continues to get more dysfunctional.
Since I am not enrolled in Medicare and my birthday is in March I was surprised to get this email a few days ago. Obviously Medicare does not follow the best practice used in the business world of verifying email addresses by using a Double Opt-in process. I guess I will continue to get the other Mr. Huber’s Medicare emails until he notices that he is not getting emails from Medicare. Arghhh!
What I found particularly interesting in the email is the fine line between preventive care and what looks like Medicare going the extra yard to drum up business for the health care industry. I am really curious whether this strategy will achieve different results than the Oregon Medicaid Experiment which showed no statistically significant impact on physical health measures despite increased use of health care services.
Dear WILLIAM H HUBER,
Happy Birthday from Medicare! We wish you well in the upcoming year and want to remind you of the preventive services Medicare offers to help you stay healthy.
Our records show that you have not taken advantage of some of the preventive services which are available to you now or in the future and listed in the table below. Please talk with your doctor to decide which ones are right for you.
|ANNUAL WELLNESS VISIT||10/01/2016|
|ALCOHOL MISUSE SCREENING||10/01/2015|
|ABDOMINAL AORTIC ANEURYSM||10/01/2015|
|CARDIOVASCULAR DISEASE (BEHAVIORAL THERAPY)||10/01/2015|
|HIGH INTENSITY BEHAVIORAL COUNSELING||10/01/2015|
To see more details of the services you are eligible for, visit www.MyMedicare.gov and select “Preventive Services” under the “My Health” tab. Or, talk to your doctor for more information.
Remember, Medicare is your partner in health.
Centers for Medicare & Medicaid Services.
For some time I have been toying with a single rate solution for some of our healthcare problems with the poor and the elderly. The disparity in prices paid for the same health care service between Medicaid, Medicare, insurance companies, and uninsured patients is the definition of insanity. It is hard to believe that we actually believe we can reform health care when we keep pricing the services the same stupid way over and over again. Pricing insanity equals lots of unintended consequences. After reading a blog post on The Incidental Economist I realize that this system is called an “all-payer rate setting”. So here are my ideas:
- All-Payer Rate Setting for the Poor
- All-Payer Rate Setting for the Elderly
- All-Payer Rate Setting for the High Cost Patients
All of these groups suffer from price insanity. My inner MBA say that a mutually acceptable price for a health care service exists between the Medicaid, Medicare, and the insurance company prices. The all-payer rate setting for the poor would close the gap between Medicaid, the insurance companies, and the uninsured. Hopefully this would minimize the financial impact of coverage gaps caused by Medicaid churning. Likewise the all-payer rate setting for the elderly would close the gap between Medicare, the insurance companies, and the uninsured. In this case I am referring to the elderly as older than 55 and hopefully it would reduce the impact of community rating on individual insurance group market and take advantage of Medicare pricing power. The all-payer rate setting for the high cost patients is an attempt to control or cap costs. If we combine all-payer pricing with a discount schedule based on income and family size like they have at Trihealth, we probably have a pretty sane pricing solution for the groups who have the greatest financial risk from a health care disaster. The loser in all of these cases is the hospitals, doctors, and drug companies but these are the folks who benefited from the price insanity. This is what you should expect when the U.S. total health expenditure (PPP) per capita leads the rest of the world by a considerable margin.
I got a nice email from Laura at AssistedLivingToday who pointed out a broken link on my site and provided me with some helpful information about Medicare and elderly health care options. Since I have not looked into assisted living options I checked out her site. It was easy to use but it did not provide any recommendations for my zip code. So I searched the internet assisted living facilities near my zip code and came up with a few assisted living recommendations.
Here are her recommendations. The first link goes to eHealth Medicare, a division of eHealth, where you can shop for Medicare supplemental insurance. The second and third links go to a guide and Medicare cost information at www.medicare.gov. The last link goes to a doctor finder that looks a little easier to use than the one provided by my insurance company. Fortunately I do not need any of these sites. Now if I can keep it that way for the next five years.
- State-by-State Medicare Locator
- A Guide for Families and Friends of People with Medicare
- 2013 & 2014 Medicare Costs At A Glance
- Locate a Geriatric Specialist by Insurance