As the cost of health care goes up for everyone, the cost for Medicare goes up for the government as well. To understand the changes that need to be made to Medicare to help it become solvent, it is a good idea to compare it to other programs available to Americans under the age of 65.
The Medicare doctors and hospitals are the same ones that everyone else uses. The difference is in how the services are paid for. While people can pay for these services out of their pockets, they usually pay for the medical expenses with insurance. Sometimes people get insurance through their employer. When that happens, they get whatever their employer is willing to pay for. Each year someone makes a decision about the benefits based on the price of the plan to the company. These companies make the decision about what they can afford. The plans with more benefits cost more than the ones with fewer benefits. The deductible is usually raised or lowered to adjust the monthly premium. The higher the deductible, the lower the cost. They also adjust the co payments for doctor visits and prescription drugs.
Individuals and families who purchase their own insurance make the same decisions before purchasing a plan. They can choose a low deductible to pay the doctors if they go to the hospital. But if they want to save money each month, they raise the deductible and the monthly premium will drop. If you don't go to the doctor much you can also eliminate the doctor office copayment and lower costs dramatically.
Medicare has these same components to its coverage. The deductible is around $1000 dollars for hospitals. This deductible is similar to the average individual and family plan, but it is not unusual to see higher deductibles of $2500 or even $5000. After the deductible is met, Medicare pays 100% of the rest of the hospital stay. Most insurance plans that people or businesses get will drop the co insurance after the deductible to 80%, 70%, or 50% instead of 100% coverage. This will lower the cost to them each month. These benefits are for hospital stays.
Prescription drugs are usually covered by individual, family, or employer plans with just a copayment. Medicare originally did not have a benefit for prescription drugs. In 2003 the Medicare Modernization Act offered a new Part D for prescription drugs. You could opt for a Medicare Advantage plan or purchase a separate prescription drug benefit plan as well. This benefit does not add much to Medicare because the cost is typically paid for by the recipient and not Medicare.
The doctors are covered with a deductible and co insurance on Medicare. You have an annual deductible of around $100 and then Medicare will pay 80% of the rest of the doctor bill. Most individual or employer plans offer co payments for doctor visits but some do not. This co payment adds cost to the plan.
Medicare is a great plan in comparison with other regular plans. It costs nearly nothing when compared with the monthly cost that most people are paying when they reach 65. Many people will even get short term health insurance plans to cover their catastrophic needs just to bridge the gap until they qualify for the great benefits Medicare offers at a low rate to the person.