Does President Obama have a plan to fix Medicare?
President Obama believes that lowering the age of eligibility from 65 years of age to 55 years of age will fix Medicare’s funding problems. He believes that allowing an additional 20 million people to become eligible at an earlier age will fix the Medicare funding issue because each of the 20 million individuals will pay the $1,200.00 in Medicare premiums. President Obama believes that since the younger 55 to 65-year-old individuals are healthier that the additional premiums paid will offset the amount paid out by Medicare for medical expenses of the older individuals.
Will President Obama’s Medicare Plan Work?
Is this really the answer to the Medicare funding problem? Preventative care is on the rise, which is a good thing, because it can avoid very expensive treatment to conditions that if detected early can be less expensive to treat. However, is $1,200.00 in additional premiums by 20 million individuals age 55 to 65 enough to fix Medicare’s funding? Is it enough to cover preventative testing every year for those that fall in the “healthier” age bracket? The $1,200.00 President Obama is estimating in premium income for funding Medicare is for the beneficiary’s Part B (medical) because Part A (hospital) is typically provided at no cost if the individual or their spouse has worked at least ten years.
The question is exactly how is President Obama determining that the $1,200.00 per person would fix the Medicare funding issue? Perhaps President Obama believes that the majority of individuals will continue working and remain on their employer group health coverage plan if the age of eligibility is lowered to 55 years of age but because they are eligible for Medicare will choose not to opt out of Part B and subsequently pay the premium. However, there is no requirement that an individual remain on their employer group health coverage plan. If the individual does choose to remain on their employer group health coverage they can still utilize Medicare. In this case, the individual’s group health coverage plan would be the primary insurance (pay first) and Medicare would be the secondary insurance (pay second). However, more likely than not the individual will only enroll in Medicare Part A which is at no cost if the individual, or their spouse, has worked for 10 years or more. It is not required that the individual enroll in Medicare Part B. Therefore, the individual can continue to utilize their employer group coverage plan solely for their medical health care costs but utilize their employer group health coverage plan and Medicare Part A for their hospitalization coverage. Taking this into consideration, there would be no additional premiums paid to Medicare if the individual chose to opt out of Medicare Part B, but there would be additional spending to cover expenses covered by Medicare Part A as the secondary insurance for which there is typically no premium. Would this not create additional expenses that would possibly exceed the amount of Part B premiums being paid if the eligibility age was changed to 55 years of age? A possible solution to this would be for employers to offer those ages 55 and older a group sponsered Medicare Supplement instead of keeping them on the traditonal group plan. This would encourage everyone eligible to sign up for Medicare while providing comphensive converage to the individual.
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