In 1974 President Nixon in his state of the union speech pledged "to enact universal heath care: We will establish a new system that makes high quality health care available to every American in a dignified manner and at a price he can afford." Today with the new healthcare reform law it is the same question, the price and who ultimately is going to pay for it.
Price. That's the area for concern for most Americans. The debate about price, and who will pay what, is a daily headline. Currently there are two institutions paying for health care: Insurance companies and the government.
The government provides coverage through 3 main programs: Medicare, Medicaid, and the Department of Veteran's Affairs. Medicare currently is funded and run by the federal government and partially covers senior citizens over the age of 65. Medicaid is a state run program which is partially funded by the federal government and is designed to cover low-income parents, children, pregnant women, seniors, and people with disabilities. The VA covers members of the military and their families.
If you aren't covered by the government, but you do have insurance, it's likely that your policy is with an insurance company, often called a "commercial payer".
With this new Healthcare Reform it also brings other issues that each of us may face as a Senior Citizen, as a middle-aged Adult or as a Young Adult. Many of us face the same difficulty in affording healthcare, affording our prescription medications, affording insurance premiums and not having insurance. So where does this Healthcare reform mean in terms of who pays for it?
Senior citizens ultimately will pay through having difficulty in finding a physician to care for them, hospital care, getting testing, procedures and such paid for. Currently many physicians are not taking new patients on since they get paid for an example, an office visit that costs $50.00, the reimbursement they get is $10.00.
The new healthcare reform bill does have some good qualities that will help many of our citizens with prescription costs.
The first of them being the "donut hole". For those persons who hit their donut hole they will receive a $250.00 rebate this year. Many older persons however spend this amount on 1 medication once they reach the donut hole, leaving the other 5,000 to 6,000 that you will still have to pay until you reach that point that medicare picks it back up again.
The new health law does not assist people in paying their medicare premiums, money that is deducted from your social security check that is received each month. The question here is Will they raise that premium to offset their costs. Starting in 2014, the law will provide subsidies to help people with incomes up to 400% of the poverty level buy insurance coverage through state health insurance, which currently is roughly about 10,800 for individuals and 22,000 for a family of 4. Here is a site that will allow you to figure out for a single person to a family of 6 or more.
Currently, medicare A (hospital) premiums are based on the work quarter hours. For 2010 premiums are 461.00 for people who have 29 or fewer work quarter hours, and premiums are 254.00 for people who have 30 to 39 work quarter hours.
The healthcare law is also closing the donut hole and will be paying 75% of senior drug costs by 2020. The downfall of the healthcare reform law is that persons who are enrolled in a Medicare Advantage plan, these plans will be slashed substantially by 132 billion dollars over the next 10 years which leaves 10 million beneficiaries with the prospect of higher premiums or reduced benefits. For persons enrolled in these plans, premiums for Part D prescription drugs will rise an average of 5% in 2011 to 20% by 2019.
The healthcare reform law also reduces medicare payments for home healthcare by 40 billion dollars between now and 2019. A good site that is helpful in understanding the medicare reductions can be located here:
http://retirementrevised.com/video/unde ... reductions
Another issue that wasn't touched on is in regards to the demand and supply of physican's, hospital based services. Currently medicaid is a underfunded public healthcare program with burgeoning enrollment in our current economy. Many physicians are not accepting new medicaid patients. And are still saying they will not take on any further medicaid patients even after the passing of the healhcare law. Hospitals currently are seeing increased visits to ER's, which under the new law, many will find that many services that are deemed non-emergent will not get paid. This law is pushing the wellness and preventive medicine aspect of medical care. Which currently alot of places of business are already going to this and as an example: People who smoke are often charged a higher premium then those who enter into a wellness agreement, those persons are given a discount of usually 10-30% on their premiums.
Medicaid is a combination federal and state funded program for the poor and under-insured. It is the neglected half-sister in the health care reform debate. Because it is a state ran program, each state can be as generous or as stingy with its share, within limits, and reembursment rates vary widely on what they pay for. And many times the reimbursement payment takes a long time to get paid.
The new law will raise medicaid reembursement to medicare levels in 2013-2014. While primary care, general internists, family physicians and pediatritions will benefit by the new law, many specialists do not and this new healthcare law will significantly impact in how they treat, how they deliver care, and how they are compensated for their services, which in turn will affect everyone in the medicare/medicaid programs. Primary care physicians will be so overwhelmed with new patients that it will be harder to see that physician simply because he is booked solid in appointments. It also makes it difficult for primary care physicians to find a specialist willing to take medicaid patients. It is a no win situation from this aspect.
Across the nation, hospitals and physicians are encountering the same payment problems, low reembursement amounts, and it is slow paying. Right now, medicare regulations require hospitals to prove they are following and meeting certain evidence-based guidelines, which if not done, medicare refuses to pay patient's bills. With the current economy suffering from unemployment rates, being un-insured, higher write-offs, and more persons on medicaid, the healthcare field is already suffering. If you would like to know what statistics your state has for unemployment rates, medicare/medicaid participants, etc. here is a great site:
Also noted in the new healthcare reform law is that insurers must adjust their spending habits to meet new requirements. Large insurance groups must spend 85 cents of every premium dollar paid to them on actual medical care as opposed to administration costs, and individual, small groups must spend 80 cents for every premium dollar.
So what does this mean? Basically, insurance companies are paying less on actual medical expeditures than on administrative costs. This law requires them to pay more on those actual medical costs. Which I think this is the best thing in regards to the healthcare reform law. I would encourage you to read the article on the real medicare reform located above in this article. It is surprising on what the insurance companies paid with our hard earned money.
So, where is the money going to come from to pay for the 32 million people that will be included on medicaid?
One source is from a fee placed on healthcare industries. Drug manufacturers will pay the U.S. a total of 16 billion between 2011 and 2019. Health Insurers will pay 47 billion between 2011 and 2019 and medical device manufacturers will pay a 2.9% excise tax on the sale of any of their wares beginning January 1, 2013,
Another source will be on those persons who have incomes of 200,000 and higher. They will have increased medicare costs, which by the way, most physician's are in this group of people.
While this healthcare reform was needed, there are a few things that are not mentioned. Consumers that currently have insurance will ultimately be paying higher premiums, higher deductables, fewer procedures covered, and have higher prescription costs. In the long run, it will cost everyone. Here is a good example:
Imagine if you owned an apartment complex, and each apartment cost $100.00 a month in basic maintenance and expenses. naturally, you would pass on those basic costs to your tenants in the form of rent. But what if nearly half of the tenants only paid $80.00 a month, instead of the full $100.00 that you need to cover your costs? You would quickly go into debt. Debt would lead to bankruptcy. The apartment complex would close. Employees would be let go. There is one solution before financial ruin, however. You could charge the other tenants-the ones who do pay all of their rent-alittle more. You could charge them $120.00 a month to make up for the tenants who don't pay their full share.
This is the dilemma facing hospitals and doctors. The government only pays approximately 80% of what it costs to treat medicare and medicaid patients. In order to stay in business, hospitals and doctors have to recover those basic costs, so they turn to commercial payers.
Commerical payers shift costs to employers, and employers shift costs to employee's in the form of higher monthly rates and higher co-pays. It is a vicious circle. One that is going to get worse with the new law.
The one aspect of health care reform that everyone agrees on is people with healthy behaviors-regular exercise and healthy eating habits do manage to avoid the health care system altogether. (Wellness, and preventive measures)
I have to ask myself, who is really gaining 100% from this healthcare reform law. There are many pitfalls that is not being brought out to the public. There's an old saying in health care: "The quality of care you receive depends on what exit you take off the highway."