On the 49th anniversary of Medicare, let’s work to expand it

Medicare was born on July 30, 1965 primarily to help provide medical insurance for Americans over 65. As of 2012, Medicare covered more than 50 million people and it has succeeded in preventing many people from falling into extreme poverty in their old age. And of the 50 million covered, about 8.5 million are people with disabilities, who would not be insurable through private insurance plans.

Despite a few arguments, from the for-profit insurance industry, Medicare is financially more efficient that public plans (see a discussion here ). Even pro-industry arguments tend to highlight some of the advantages of Medicare. In this defense by Merrill Matthews for The Council for Affordable Health Insurance  of private sector insurance, for example, the author says, “Executives and boards of directors consider, debate and decide company policy; in Medicare that function is often handled by Congress and itmedicare for alls legislative staff. “ The authors point out that the time of Congress is also of some value, but the cost is borne by taxpayers. Of course, the time spent by private-sector administrator is also borne by those who enroll in their plans, but private-sector administrators are not accountable to taxpayers in the same way members of Congress are expected to be. The CAHI defense also points out that private insurance companies must raise money and include the cost of raising capital in their administrative costs estimates while Medicare does not include the cost of raising capital as that is done through Congress.

The real difference, according to Matthews’ argument, though, is in the amount of money spent on patients. Matthews points out that private insurance companies spend more money on administration because “they scrutinize individual provider claims much more closely, challenge questionable procedures and determine whether, in the company’s opinion, a claim is valid or needs to be reconsidered.” In other words, private insurers spend a lot more money denying claims. If you’ve ever experienced a major illness or injury, you have been bombarded with paperwork explaining why you will have to pay your own way with no reimbursement from your insurance company.

Matthews said that in 2003, Medicare spent $6,600 per patient paying claims, while private insurance paid only $2,700 per patient. This hits consumers in two ways. First, if you’ve already received treatment and the bill is denied, you are on the hook for payment. Second, the price of your premium includes the salaries of the administrators who are committed to denying your claims, so you are paying them to refuse payment for your treatment. If you think it is good that your claim was denied, leaving you with enormous medical bills after a serious illness, private insurance is the way to go. If you want to have some peace of mind that your bills will be covered, expansion of Medicare is certainly the best choice.

Nonetheless, it is true that Medicare payments need to be lowered. The costs of Medicare payments reflect the costs of for-profit healthcare. The costs can be lowered by enabling Medicare to negotiate the costs of medicine (drugs, hospital equipment, and other medical technology). The costs of common medical procedures vary wildly from city to city in the United States (to see a comparison of four services, look here). By bringing more transparency to healthcare costs, Medicare can pay providers what is reasonable, rather than what is currently possible. While many say that markets create competition that will lower prices, this is simply not the case. The reason it isn’t the case should be obvious to anyone: patients who need healthcare are in no position to shop around. After I had knee surgery in 2001, I had complications that some blamed on my choice of doctor. When asked why I chose this particular surgeon, I said, honestly, that I lay in bed with a shattered tibia, calling doctors for appointments. The doctor I “chose” was the seventeenth doctor I called. No, I did not carefully research his credentials, prices, or hospital admitting privileges. Even at that, I had to wait two days with a shattered tibia to get an appointment. This is the reality of for-profit healthcare and for-profit insurance. It is a nightmare. While Medicare may not be a blissful dream, it leaves fewer patients with healthcare induced night terrors.

Many people seem to have a false sense of security with their employer-sponsored health insurance. In the first place, they overestimate how much of their care will be paid for by the insurance. Then they seem to forget that any serious illness or accident that makes them unable to work will also make them unable to maintain their insurance coverage. The fact that your employer provides insurance today is no guarantee that it will be there when you need it. Further, under the Affordable Care Act (ACA), employers may reduce employees or hours to avoid providing healthcare, as discussed in this article in the Wall Street Journal. And finally, under the ACA may further restrict patient choices of providers, as noted in this piece in the New York Times.

Should anyone be at the mercy of employers for healthcare? Should small-business owners and the self-employed have to shoulder a disproportionate burden for healthcare? Medicare for All is an equitable solution that is fair to everyone and enables us all to pursue our vocations according to our dreams and talents rather than our fear of medical bankruptcy. The time to expand Medicare was 49 years ago, but let’s do it now. Support H.R. 676.

Additional Reading: For more resources on this topic, see the Public Health and Social Justice website.

About ethicsbeyondcompliance

I hold a PhD in medical humanities with an major emphasis in ethics. I began teaching college-level ethics in 2000.
This entry was posted in bioethics, Politics and tagged , , , , . Bookmark the permalink.

4 Responses to On the 49th anniversary of Medicare, let’s work to expand it

  1. Dennis Byron says:

    1. “Medicare was born… to help provide medical insurance for Americans over 65.” That sentence might lead one to believe that Americans over 65 did not have health insurance when “Medicare was born.” In fact. about 60% of then seniors had health insurance, at a time when only 75% of people under 65 had such insurance. Health insurance was just not a big deal at the time.

    2. “Medicare.. has succeeded in preventing many people from falling into extreme poverty in their old age.” In addition to the imprecision of the word “many,” it is probably more important to note that Medicare is basically free if you are over 65 and truly have a low income (about 18% of us seniors) but that many (millions in fact) purposely spend themselves down into poverty at the advice of counsel in order to get Medicaid.

    3. It is absolutely ludicrous to say “Medicare is financially more efficient” than other plans when the rate of fraud, waste and abuse is admittedly somewhere between 10% and 20%. In fact, Medicare is so inefficient that the government cannot even peg how bad the problem is.

    As for Medicare for All, I would not wish the terrible insurance that is Medicare on anyone else. Medicare is so bad that over 95% of the people on it make other — mostly private — supplemental arrangements to protect themselves financially.

    • As far as I know, all Medicare supplemental plans come from private insurance companies, who I am sure would hate to see the Medicare gap closed. Fraud and abuse is the product of healthcare driven by profit rather than health. Greater transparency in the industry, some of which is mandated by the Affordable Care Act, may help us at least see what kinds of charges are being thrown at us and how unevenly prices are set from hospital to hospital. (Also see Stephen Brill’s piece in Time.) The Sunshine Act will also reveal some of the financial relationships between industry and providers. Medical bills are the number one cause of bankruptcy in this country, which is a situation unique to the United States. Only in the United States does it seem normal to have fundraisers to help friends and relatives pay their medical bills. We need reform, and we need it now.

  2. Thank you for your thoughtful ethical perspective on Medicare for all. SOMEday we’ll win. Dennis (above) should study House Resolution 676 & note the cost efficiencies in the plan. When a public plan is expanded & improved with proper inspectors & auditors, it’s a good thing when crooks are caught. How many fraudulent providers are being busted in the hugely profit-making private sector?
    See some of the data at Physicians for a National Health Program website e.g. http://www.pnhp.org/news/2013/september/new-york-times-exposes-the-injustices-of-private-insurers-narrow-networks. On the contrary Dennis, the majority of folk using Medicare LOVE IT!, & will fight to keep it from further privatization, diminishment or loss.
    Also see the Kaiser Family Foundation website: http://kff.org/medicare/report/how-much-is-enough-out-of-pocket-spending-among-medicare-beneficiaries-a-chartbook/
    Bottom line: do you believe that health care is a human right or a civil right? or not? http://phsj.org/universal-health-caresingle-payer-system/
    Expanding and improving an already tested public insurance beloved by millions of Americans– Medicare for All –is the most cost-efficient and equitable solution to remedy the dysfunctional US medical profit system.

  3. Pingback: Medicare at 50: Our Moral Imperative | Ethics Beyond Compliance

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s