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Medicare's unexpected beneficiaries
A woman holds a sign that reads "Hands Off Medicare" during a news conference at the U.S. Capitol in Washington, D.C.
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When you think of Medicare’s beneficiaries, you probably think of senior citizens. They account for more than 80 percent of the 49 million Americans on Medicare. Medicare beneficiaries also include younger Americans with disabilities and terminal kidney disease.
But Medicare has helped millions of other Americans: the children and grandchildren of elderly parents.
Every morning, Jeff Gordon takes his dad, Albert, to an adult daycare center in Washington called Iona Senior Services. The staff calls Albert, who is 101 years old, “Mister G.”
Four years ago Jeff Gordon moved his dad here, from Detroit, to live with him and his wife. Albert -- like anyone who has lived a century -- sees a lot of doctors: an internist, a cardiologist, a dermatologist, an ear-nose-and-throat specialist, and a podiatrist. And then, there is the occasional unplanned visit.
All that medical care is expensive. According to Jeff Gordon, the bills from this year alone are at least $18,000.
“It’s outrageous,” he says. “I mean, just to have a podiatrist to clip his nails, that’s $150. And if he goes into the hospital, you’re talking $5,000, $6,000, $10,000, just for a visit, to find out what happened.”
Jeff’s Gordon’s mother-in-law is 93, and she also lives with him. Last year, doctors discovered she had a tumor, so she had to spend 10 days in intensive care, then another week and a half in the hospital.
“That bill must have been $100,000,” he remembers. “And I don’t care how much money you save for retirement. $100,000 goes pretty fast in the health care system.”
Jeff says Medicare has made it possible for him to care for her and his dad, whose annual income from Social Security is just over $16,000.
“If he wasn’t on Medicare and we had to cover all these costs out of pocket, not only would it bankrupt him, but it would probably bankrupt us as well.”
Medicare’s architects had that in mind when they came up with the program.
“Medicare was designed as an intergenerational program, to help retirees, but also to help their children by sparing them from the costs and the burden of paying for their parents’ medical care,” Jonathan Oberlander says. He’s a professor of public health at the University of North Carolina at Chapel Hill.
Democratic Congressman John Dingell helped vote Medicare into law in 1965, and he remembers what elderly care used to be like, in the days before Medicare: “Well, it was pretty grim. Senior citizens were depending either on charity or on their kids in most instances.”
Back then, insurers wouldn’t offer coverage to seniors because they were seen as too high a risk. According to David Rosner, a public health professor at Columbia University, when it came to paying for an aging parent’s medical care, children faced a tough choice.
“It was going to either come out directly of your pocket, or alternatively, you were going to have to abandon your mom and pop,” he says.
It is hard to quantify how much Medicare has helped people like Jeff Gordon, who care for older parents.
Health care economist Marilyn Moon says it helps to think about how much it would cost for an elderly person to buy health insurance on the open market. That would be around $10,000 or $11,000 per year, she estimates.That’s maybe five times what a healthy, middle-aged American pays.
“So that means that, if you were a family trying to help out your mother or your grandmother, that would be a substantial chunk of resources,” Moon says.
Last year Medicare spent nearly $400 billion to provide health care for seniors. That also represents nearly $400 billion in savings that seniors and their families could use to spend on other things.
The typical senior lives on about $22,000 a year, and Oberlander says that’s why most Americans see Medicare as essential.
“The fact that the government is there, that we as a society are there, to pool together and pay for them together as a community is a tremendous help to families -- because those younger families, were it not for Medicare, they would be the ones who would be left holding the bills,” he says.
Congress and the American people will have to make a choice. Medicare’s current course is disastrous, for seniors and taxpayers alike. There are finite resources available to reverse the current course, but the faster that policymakers act, the less difficult the task will be.
It's silly to make the arguement that we'd all be so broke if we didn't have medicare paying our bills for use because without programs like medicare, the cost of medical care would be a lot lower. The 3rd party payer problem is alive and well because the government always pays, they never says "You want how much to clip my toenails? Well I guess I better bend over and clip my own toe nails myself."
The other thing is that the story says that in the past old people depended on the younger generation to support them. Well this is exactly what is happening with medicare. The payments of current workers is paying the medical bills of people in their parents and grandparents age, only difference is the government is in the middle not asking why things cost so much, just paying. And these people are taking out way more than they put in on average. They aren't entitled to take more than they gave.
Everybody likes something they think they're getting free. They don't want to look ungrateful no matter how bad it is.
These ponzi schemes are going to bankrupt the country because the politics create a barb that is so painful to remove, we'll never be rid of it. People become dependant, and vote for politicians that promise to keep supporting their dependancy. They don't tax enough to support the costs, so they charge the rest on the countries credit card and stuff the bill under the matress when it shows up.
The other tough situation that isn't being addressed is how much resources should you invest in someone that's already at the end of their life? If people payed for themselves it would be bounded by what they're worked for and saved, but the way it is now their is no practical limit, the hospitals just keep charging. The money that is wasted comes necessarily at the expense of the rest of the population. They'll have to work another 10 years for example, to pay the medical bills of someone that extended their life by 6 months in a hospital somewhere.
The author really needs to dig a little deeper on this story. Actually talk to these people in depth and I think he'll find that there is supplemental -- most likely -- private insurance involved in all the cases. The odds are 95% that that's the case because only 5% of Medicare beneficiaries depend on Medicare without some kind of supplemental -- almost always private -- insurance.
When he says:
"Every morning, Jeff Gordon takes his dad, Albert, to an adult daycare center in Washington called Iona Senior Services."
Medicare does not pay for that.
When he says
" Jeff Gordon... sees a lot of doctors: an internist, a cardiologist, a dermatologist, an ear-nose-and-throat specialist, and a podiatrist. And then, there is the occasional unplanned visit."
There is a 20% co-pay on all those visits under Medicare after a $150 annual deductible. And I don't think Medicare pays for podiatry at all (it's not on the list in Medicare and You but maybe there is some underlying medical reason for the treatment). Nor does Medicare pay for dentists, eye exams, most drugs, annual physicals, etc. etc.
So when the authors says "
"all that medical care is expensive... the bills from this year alone are at least $18,000."
the family would still be responsible for $3600 under Medicare, more if the adult day care is included in the $18,000.
When he says
"... you’re talking $5,000, $6,000, $10,000, just for a visit, to find out what happened.”
Under Medicare, the family could be responsible for as much as $2000 to find out what happened, depending on whether the patient was admitted or just observed.
he says "Jeff’s Gordon’s mother-in-law (spent) 10 days in intensive care, then another week and a half in the hospital."
Here is the good news. Medicare would have paid all but $1156 for this hospitalization (I am assuming she was admitted) but the family would have been responsible for 20% of the doctor fees under Medicare, possible the biggest part of the expense. And Medicare does not cover such hospitalizations forever. There is a per-incident and lifetime limit.
Again, dig a little and I think you'll find that retiree insurance, or medigap, or possibly Medicaid or Part C Medicare health plan (the latter two designed for low income situations) is involved. Mostly likely Part D Medicare drug plans are also involved.
Because of Medicare's deficiencies, seniors pay over 50% of their health costs out of pocket. And that's not counting the 40-50 years you paid Medicare taxes out of your paycheck (the 100 and 93 year olds in this story wouldn't have started paying until 1965 and probably retired shortly thereafter so they are getting a good deal but that is not the norm).
The author concludes:
"Last year Medicare spent nearly $400 billion to provide health care for seniors. That also represents nearly $400 billion in savings that seniors and their families could use to spend on other things."
But doesn't count the taxes contributed. I thought this was some kind of financial analysis web site?
