Medicare showing its age
By Brooks Jackson/CNN
March 15, 1999
WASHINGTON (AllPolitics, March 15) -- Four decades after it was instituted to help America's older citizens maintain their health, Medicare itself is now showing its age.
The program helps nearly 40 million Americans pay for health care. However, it does so at a cost to recipients and the taxpayer that political leaders and economists agree can't be maintained as the Baby Boom generation reaches retirement age.
At the same time, the level of care it offers, considered generous in 1965 when Medicare debuted as a centerpiece of President Lyndon Johnson's Great Society, now seems bare-bones compared with what private sector health plans offer.
Medicare currently sucks up nearly 13 percent of the entire federal budget, and that share is growing.
Today, nearly four Americans are working -- and paying -- for every one receiving Medicare. However in 12 years, when millions of babies born after World War II start turning 65 and become eligible for the program, that ratio will drop sharply.
In 21 years, fewer than three workers will be paying taxes for each person on Medicare. In 31 years, that will drop to 2.3.
Even with current funding, the level of care is low -- and out-of-pocket expenses are high -- for Medicare recipients when compared with private sector plans.
Basic Medicare lacks features common in private plans, such as routine physicals, eye exams and dental services. The program also offers only limited coverage for hospital stays.
For example, Medicare patients pay the first $758 in hospital costs, and then pay $192 per day for any hospitalization longer than 60 days. After 90 days, the recipients' per-day cost goes up even higher.
Currently, Medicare's coverage is worse than four out of five plans offered by big employers: Of every dollar in medical bills for persons covered, Medicare pays only 52 cents.
But Medicare cannot afford to continue even that level of care as the number of recipients soars without major infusions of cash.
Clinton has proposed a stopgap plan of devoting 15 percent of government surpluses expected over the next 15 years, for a total of $650 billion to $700 billion, to keep Medicare from running short of cash for another 20 years.
But further savings would be needed to keep Medicare out of financial trouble beyond that, and the president has not proposed a plan to solve Medicare's long-term problem.
Tough measures are being debated by the National Bipartisan Commission on the Future of Medicare. Among them are raising the age of eligibility to 67, raising premiums for those with high incomes and shifting the program's focus to helping elderly Americans buy health insurance instead of paying individual medical bills, as it does now.
The commission missed its original March 1 reporting deadline and seemed deadlocked.
But a revised medicare reform proposal was unveiled Monday, just 24 hours before the final meeting of the commission.
At a press briefing, the co-chairman of the commission, Sen. John Breaux (D-Louisiana) and Rep. Bill Thomas (R-California) said their plan offers "no significant" changes from earlier versions except that it addresses "a number of adjustments" other commission members wanted.
The two believe they have a majority of the members behind the plan, but concede they are still short of a "super-majority" needed to send the plan onto Congress for its consideration.
Monday, March 15, 1999
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