Medicare, why should you care? Public or Private?

Do you know if your insurance is public or private? When we turn 65 or become disabled, what do we want for ourselves? How concerned are we for others in our communities? Can we really think about the whole country and everybody as a part of a larger community? Or do we just think about ourselves or our immediate family or a particular group?

Take a look at the facts about why funding for Medicare is dwindling, match them to what you know from your own experience with healthcare and balancing a budget – then let your representatives know how you would like them to prioritize healthcare spending, before it’s too late.

What are the Facts?

Where do the Trust Funds come from?

Medicare’s funding comes from three sources: a payroll tax dedicated specifically to the program and paid by everyone that works, premiums that patients pay when they use Medicare, and general government revenues (mostly from income taxes).

In the past, there was more money being paid by workers into Trust Funds than elderly people and retirees who need it.

The funding warning was issued because for the 2nd year in a row Medicare is expected to draw more than 45 percent of its funding from general government revenue.

What are the Funds used for?

Although the money in the Trust Funds can technically only be spent on benefits, the government now borrows money from the funds to pay for other programs.

Essentially, the Trust Funds take in payroll tax income and lend it to the federal government in return for government bonds, or Treasury Securities.

In a very few years, there will be more people retiring (the baby boomers), and the Funds will have to begin cashing in these bonds in order to pay for the health care benefits on time that retirees are owed and must have.

That will put pressure on the overall budget, limiting the government’s ability to pay for other important programs and/or creating the need to raise taxes.

How serious is this problem? Lawmakers would need to cut spending on all other federal programs by 50%, or increase taxes by about 33% by 2030 in order to pay for benefits promised under Medicare and Social Security, according to Federal Reserve Chair Ben Bernanke in October 2006.

And in the not-so long run, THAT is something that will affect each and every one of us.

What’s the Issue?

For the first time, Medicare trustees have issued a “funding warning,” requiring President Bush to propose legislation to cut costs in the program next year.

Most of us have already heard that Social Security and Medicare are running out – the programs own trustees now predict that Medicare’s hospital trust fund will run out in 2019.

But these dates are actually a year later than their prediction in 2006. So why require the president to propose a cost-cutting plan now? The warning measure was a little-noticed section of the 2003 Medicare Prescription Benefit for seniors – a law which will increasingly impact all of us who pay taxes and use healthcare.

Keep reading to learn how the future of the Medicare affects you – and how you can affect the future of Medicare.

Click here for a thorough analysis of the Medicare Prescription Benefit.

Medicare & the Healthcare System

Today, Medicare and Medicaid spending account for almost one out of every five dollars the federal government spends. That’s likely to become one out of every three dollars by 2040. But where are all those tax dollars going?

The facts are that in terms of health care we want it all. We want quality, we want affordability, cost, we want to make choices of our own, and we want to get the help we want when we want it, as quickly as possible and in a convenient place. But of course we know that each policy has trade-offs

The current administration already made changes to shift the system away from a government guarantee to their philosophy of more individual responsibility and more competition between private corporations.

Some would like to move further in this direction, lowering payments to doctors that they say are too high already and holding each of us more accountable for choosing a lifestyle that keeps us healthy.

But many disagree, saying that Medicare is in danger of becoming a tax-payer subsidy for private insurance companies, which are not accountable to the people for controlling cost and waste.

Many in this camp say that quality healthcare is worth paying top-dollar for, and that government is the best candidate to regulate cost and waste, because unlike private companies, it doesn’t have to focus on the bottom-line.

Pick a Plan

Unfortunately, when it comes to actually choosing a plan, the difference between public and private isn’t always black and white. Insurance companies sell both private fee-for-service plans as a replacement for traditional Medicare, and polices called Medigap to supplement Medicare.

Plus, names can de decieving. For example, some plans called ‘Medicare Advantage’ aren’t Medicare at all. Private plans like these often offer extra benefits like savings on glasses and dental care, but with higher copays for all medical care (sometime much higher).

And these plans cost the government more of our tax dollars too. The private are paid an average of 12 percent more per beneficiary than it costs to cover people enrolled in traditional Medicare.

That’s why it’s so important for all of us to match the facts to the philosophy we prefer – especially when making decisions about something as important as healthcare.

Pick a Policy

Our research has shown what many women would suspect – that the philosophies of both parties appeal to women.

So how do we decide which policy to support? Each of needs to understand the facts and trade-offs of different plans and then pay attention to how they actually play out and the effect that they have on our lives. All of us need to pay close attention to our own choice and that of our families.

Do you know if your insurance is public or private? When we turn 65 or become disabled, what do we want for ourselves? How concerned are we for others in our communities? Can we really think about the whole country and everybody as a part of a larger community? Or do we just think about ourselves or our immediate family or a particular group? Is it fair for retirees to choose private plans that are much more expensive to taxpayers as well? Should the quality, choice, and cost of the healthcare that we receive depend on our ability and willingness to pay the cost?

We need to know what we believe is right, match it to what actually happens, and then tell our representatives exactly what works and what we want for the future

Put in your ZIP code below, find your representatives, and let them know what you think!

You can also discuss details with other WomenMatter readers on our blog.

To explore our archive of past Health Issue updates, click here.

About WomenMatter

WomenMatter is a place to discuss life issues with other women. We don’t want to wedge women apart, but rather bring them together to dialogue.

WomenMatter is the place where we can take one issue at a time, match what we do about it every day of our lives to the facts of the bigger system that we all live in and recognize that every idea for making it better has tradeoffs.

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