Medicare Reform: the Elephant in the Room

The Wall Street Journal reported in their SmartMoney section on House Budget Committee Chairman Paul Ryan's proposal to stem rising Medicare costs. According to the Centers for Medicare and Medicaid Services, Medicare spent an average of $11,743 on beneficiaries in 2009, an amount Ryan calls “unsustainable.” Ryan’s plan essentially aims to lower that average to $8,000 a year.

Under his plan, for anyone born after 1956, that $8,000 figure becomes the ‘new’ entitlement guarantee – although more may be guaranteed in the case of old age or special infirmity.  Here’s the major change however, rather than the doctors or healthcare providers applying directly to the Medicare system for payment, the bills will be sent to your health insurance company with the first $8000 in costs reimbursed directly to the insurance company by the government. In other words, Medicare would pay the first $8000 of your health care expenses but beyond that it would be up to you to find health insurance coverage or pay out of your own pocket.  This would not affect anyone until they were entering the Medicare system in 2022 upon turning 65 or disabled.  Prior to that year, enrollment in the Medicare benefit would remain the same.

Whether you love or hate this plan, it shines a spotlight directly on our health care system and its largest problem:  given a chonic need, how can anyone afford the cost of care over a long period? I see this problem every day in our elder law and special needs practice. For the most part, my clients realized that the health care costs in this country are unsustainable but unless we solve what is driving those unsustainable costs, it wouldn’t matter what the Medicare reimbursement is, it will never be sufficient for those with chronic or catastrophic illness.  What is worse, if the federal government, the largest health care insurer in the country, is unable to pay the cost of health care, how can we possibly believe that insurance companies will fare any better? Obviously, what Ryan is counting on is that the insurance companies will better control the waste, fraud and abuse that is so prevalent in the government program but is that the only factor driving health care costs ever higher?  Somehow, I don’t think so. I didn't believe that when President Obama first proposed it and I don't believe it now.

Since a reasoned solution must be found and soon, the very least the Ryan plan has sparked it some creative discussions.  Government subsidized private health insurance could mean that seniors and the disabled will have access to plans that can be tailored to fit them more precisely and healthier seniors  could see reduced costs; add to that a better awareness of what we are being asked to pay for services rendered and it could be the start of real health care reform.

Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest

Leave a comment


We have a LOT more where that came from!

We hate spam too. We will never share or sell your information.

Call Now ButtonCall Us Now https://jsfiddle.net/7h5246b8/

Request a free consultation

We hate spam too. We will never share or sell your information.

We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
  • We launched the rollout of our on-demand webinar early so that new clients and our allied professionals can view the important component parts of ‘an estate plan that works’ at their convenience.  That is available on our website.
  • Live video workshops will be produced as quickly as possible and certainly ahead of our previous schedule; we will keep you posted as these events become available. Given the ‘boutique’ nature of the firm, we rarely have more than ten people in our office including team members at any one time. During this period of ‘social distancing,’ we promise to have no more than 8 people at any time.   This allows us to comply with the Governor’s directive to limit in-person gatherings.
  • The best way to communicate with us is still by phone during regular office hours of 8:30 to 5:00, Monday through Friday, or, you can email any of our team members (that is, their first name followed by @zarembalaw.com).  We will respond to these emails as quickly as possible.
  • Please continue to follow the directives of our local, state, and federal agencies. For your health and in consideration of our team who is assisting you, if you’ve scheduled an office appointment or planned to drop off paperwork and are experiencing a fever, dry cough, or shortness of breath, please contact your primary care doctor for guidance and then our office to reschedule.

Thank you, Walt and the Zaremba Team

Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.