Hopeful News for the Future of Medicare

The November, 2014 "AARP Bulletin" listed some encouraging news for people who are on Medicare or who expect to enroll in Medicare sometime in the future.  Steps are being taken to help Medicare remain solvent somewhat longer than originally expected, even if Congress continues to drag its feet in making funding changes to the program.  Here is a summary of what AARP reported:

Medicare Will Spend Less Than Projected

One of the reasons that the Congressional Budget Office originally predicted that Medicare would run out of money within a decade is because they anticipated that by 2019 Medicare would be spending $14,913 per year for each beneficiary of the program.

However, Medicare costs are not rising as fast as anticipated.  Recently,  the CBO has revised its numbers and now they only expect Medicare to spend $12,478 per year for each beneficiary by 2019.

That is almost $2,500 less per person than they originally projected and is great news for the solvency of the program.

How Medicare is Saving Money

Medicine and medical care has been changing over the past few years.  Hospital stays are getting shorter and, as a result of the Affordable Care Act, there are new incentives for hospitals to take better care of people the first time ... thus reducing the number of re-admissions.

In addition, we Baby Boomers have been taking pretty good care of ourselves.  The influx of younger, healthier Baby Boomers into the program is helping to keep costs down.

More Health Insurers Are Participating in Obamacare

While a few insurers have dropped out of the program, in 2015 they were replaced by 77 new insurers who were offered additional plans in 44 states.  While not all of these insurers will be offering Medicare Advantage or Medicare Supplemental plans, evidence indicates that the more insurers there are in the marketplace, the lower the premiums.  This is good news, both for people on Medicare as well as their younger family members.

More Insurers are Covering End of Life Conversations

The most expensive healthcare often occurs during the last few months of a patient's life.  Often they receive treatments that they do not want, can be painful, and will only minimally extend the length of their life, while decreasing their quality of life.

I saw this personally a few years ago when a 97 year old neighbor was put through open heart surgery.  She never returned home and was in pain during the remaining few months of her life, which she spent in a nursing home.

Now some insurance companies are paying doctors who want to have a conference with their patients about their end-of-life decisions, so that people can decide for themselves what they want to do ... before they are in a crisis situation.  The American Medical Association has also put in a request to Medicare, asking that they also consider paying doctors to discuss these issues with their patients.

There are several benefits to these discussions.  While encouraging end-of-life conferences could save money on unwanted medical treatments, the more important issue is that it will also enable people to have more of a say concerning the treatments they receive during the last few months of their lives ... and whether they want to spend that time at home or in a hospital or skilled nursing facility.

The Government is Cracking Down on Medicare Fraud

Another important issue for the future of Medicare is the effort to reduce Medicare fraud.  It costs the program billions of dollars and seems to be getting worse, rather than better.  In order to keep the program solvent, federal agents and prosecutors are putting more energy into prosecuting these cases.  The Justice Department is using Medicare billing data as one way of tracking cases of fraud.

Retirees who are concerned about keeping Medicare solvent should report any cases of of suspected Medicare fraud in their community.

If we want Medicare to be available as we get older, we all need to report any suspicious charges listed on our bills ... for example, for treatments we did not receive.   Medicare beneficiaries should also file a report any time they hear of someone who is getting kickbacks from doctors for agreeing to get treatments they do not need, or for agreeing to say they received treatments, when they did not.

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