Medicare is a bear to write about. It’s tough for beneficiaries to understand, and unclear news stories only serve to compound their confusion. That’s what last week’s LA Times story on Medicare costs did. The paper’s thesis was that seniors’ medical bills “could jump hundreds or even thousands of dollars,” and the top supported that storyline. A Medicare expert from Brookings opined that people would pay more. Yes, that’s true. Some among the elderly are better off than when Medicare was enacted, but half still live on incomes below $22,000—also true. There’s interest in charging beneficiaries more as a way to slow spending, which is happening in the commercial market. True again. People may not realize Medicare’s benefit package is not very generous. Beneficiaries know that and that’s why polls show they are not keen on the pols tampering with the program.
That’s when the story ran into trouble. The Times reported: “On top of standard premiums of more than $141 a month, enrollees must pay a $1,132 deductible for every hospital stay.” That one threw me. I wasn’t sure what premium of $141 the reporter had in mind. Perhaps he didn’t quite understand how Medicare Part B works. Part B pays for physicians’ services, hospital outpatient care, and lab fees. This year the standard premium for Part B is $115.40 a month. Those with incomes above $85,000 ($170,00 for couples) pay higher premiums. Now Part D premiums, which pay for the drug benefit—vary depending on the plan a senior chooses from a private insurer. The premiums can be high or low; some plans don’t charge at all.
The story reported that seniors are also responsible for twenty percent of the bills for medical equipment, making it seem like that is the only coinsurance requirement in the program, and omitting the major one—physicians’ services. Virtually every beneficiary goes to the doctor during the year, and when they do, they are on the hook for twenty percent of what Medicare approves for payment, not necessarily twenty percent of the billed amout. There can be a big difference between what the doctor bills and Medicare approves. So most people buy supplemental insurance to protect them from these risks, and this is what the pols in Congress want to tamper with.
The reporter noted that some Medicare services such as lab work and home health care require no copayments and were “effectively free for beneficiaries.” They may be free at point of service, but they are not free. Beneficiaries pay for them through their Part B premiums and through their income taxes. Part B is partially funded by general tax revenues so everyone pays for them. That’s how social insurance works, a point not well understood. A little help from the paper would have been nice. And, for the record, while seniors may not pay for the lab service per se, they do pay twenty percent of the approved amount for the doctor visit. That twenty percent coinsurance again!
One point seemed to undermine the story’s main idea. It reported that House Republicans faced a “fierce backlash” when they embraced Wisconsin Rep. Paul Ryan’s plan for a Medicare voucher plan that would raise an average senior’s medical bill by $6,000 in 2022. Then readers learned that none of the proposals discussed would shift costs that dramatically. But didn’t the lede say that seniors’ bills could jump “hundreds or even thousands of dollars?”
Other points needed more context and amplification. A quote from Gail Wilensky, who ran the Medicare program during Bush I, sang the old “skin in the game” mantra arguing that paying more and making better choices would be therapeutic. Said Wilensky: “We will do better if people are more involved in making healthcare choices. There are few people who are more price sensitive than seniors.”
How many more choices do seniors on Medicare need? Most of them now have more than they can deal with; some have more than one hundred options to choose from. Dot-connection time here!