If you’re approaching age 65, or perhaps you’ve recently had your 65th birthday, you may be seeking more details on the pros and cons of Medicare. This article explores the Medicare program, how it works, and some hot topics related to the program’s potential future.

Pros of Medicare

Medicare Provides Coverage to Millions

In many senses, Medicare works. Thanks to the program, millions of aging adults have been able to receive coverage. Medicare also covers many younger Americans with disabilities.

Medicare is considered helpful because it covers so many people.

Medicare Costs Very Little Every Month

Many Medicare enrollees qualify for premium-free Part A but must pay a small, out-of-pocket amount every month for Part B. In 2021, the standard premium for Part B is $148.50 per month.1 When you compare this to the out-of-pocket cost of operations, prescriptions, and other associated expenses, the savings can be beneficial.

Medicare Advantage Plans Offer Additional Coverage

More and more Americans sign up for Medicare Advantage (Part C) plans each year, and enrollment is expected to keep growing in the future. In fact, enrollment was at 24.1 million in 2020.2

Medicare Advantage plans offer beneficiaries an alternative way to get Medicare benefits through plans sold by private insurance companies that contract with the Centers for Medicare & Medicaid Services (CMS).

You get all the Medicare program benefits of Part A hospital insurance and Part B medical insurance, together known as Original Medicare,* when you enroll in Medicare Advantage. Plus, many Medicare Advantage plans can also provide additional benefits (dental, vision, hearing, etc.) at a minimal cost. These services are essential to older Americans who may otherwise go without them.

Medicare Has Led to Prescription Innovations

The inception of Medicare created a massive market for prescription drug companies. Suddenly, Americans had greater access to prescriptions. When pharmaceutical companies saw the untapped potential in the Medicare market, they began investing in the development of drugs created specifically for seniors.

The addition of Medicare Part D prescription drug plans and Medicare Advantage prescription drug plans (MA-PDs)—both sold through private insurance companies—also gave Americans wider access to prescription medicines.

Medicare beneficiaries have had access to these plans since 2006, and enrollments in MA-PDs have increased every year since. In 2020, 48 million (77%) people on Medicare were enrolled in Part D, according to the Kaiser Family Foundation.3 With millions of Americans receiving Medicare prescription drug benefits, this may have given pharmaceutical companies more opportunities to develop drugs for this market.

Medicare Has Resulted in Increased Medical Standards

With the creation of Medicaid and Medicare, Congress created a set of standards for hospital enrollment in the programs. As time went on, the government became more involved in overseeing these standards and now requires public reporting on things such as hospital infection rates and readmissions.

 

Cons of Medicare

Medicare Costs a Huge Amount to Administrate

In 2020, Medicare spending was projected to be $858.5 billion. That number isn’t expected to get smaller, with CMS estimating that it will increase to over $1 trillion by the end of the decade.4

Hospital Stays Can Be High in Cost

Even for those enrolled in Medicare, hospital stays can still be costly, easily running into the thousands.5 Many people enrolled in Medicare experience unnecessary hospitalizations. This places an increased burden on hospitals, which can then increase the prices across the board for all patients.

Additionally, because many Medicare enrollees are in a low-income bracket, they can’t afford these stays, placing a crushing burden on them and putting the hospital in a difficult spot.

While Medicare can help those who are struggling medically, it can also create a significant strain on the overall healthcare system in the United States.

Medicare Costs Taxpayers

A portion of Medicare funds come from payroll taxes. With the current Medicare tax rate set at 2.9% (split between employers and employees) — and an additional 0.9% or those making more than $200,000 — this represents a significant amount of money coming out of each paycheck.6

What About Medicare for All?

Medicare for All, also known as universal or single-payer healthcare, is a concept you’ve heard about but might not know exactly how it works. There are different versions and proposals, but at its core, it means that nearly all Americans would have access to the type of government-funded healthcare currently provided only to those over 65 or disabled.

In some Medicare for All proposals, all Americans would be covered by the government program and private health insurance would be limited to offering only supplemental insurance for procedures not covered by the government program such as elective plastic surgery or hearing aids. Other versions maintain the private insurance industry but provide the government program as an option.

Review Medicare Plans With HealthMarkets

When applying for a Medicare plan, your best bet is to do plenty of research. Find out what’s available and what benefits are offered by comparing plans with HealthMarkets. You may be able to get a better health plan through a private insurance company.

HealthMarkets can help you make the Medicare choice that’s right for you and your loved ones. Start reviewing your options today, or determine if you qualify for Extra Help with prescription costs.

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References

* Medicare Advantage doesn’t cover hospice care, but Original Medicare covers it for people with Medicare Advantage plans.

1. “Part B costs.” Medicare.gov. Retrieved from https://www.medicare.gov/your-medicare-costs/part-b-costs Accessed August 23, 2021. | 2. “A Dozen Facts About Medicare Advantage in 2020.” KFF. January 2021. Retrieved from https://www.kff.org/medicare/issue-brief/a-dozen-facts-about-medicare-advantage-in-2020/ | 3. “Key Facts About Medicare Part D Enrollment, Premiums, and Cost Sharing in 2021.” June 2021. KFF. Retrieved from https://www.kff.org/medicare/issue-brief/key-facts-about-medicare-part-d-enrollment-premiums-and-cost-sharing-in-2021/ | 4. “National Health Expenditure Projections, 2019–28: Expected Rebound In Prices Drives Rising Spending Growth.” HealthAffairs. March 2020. Retrieved from https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2020.00094?journalCode=hlthaff | 5. “Why health insurance is important.” Healthcare.gov. Retrieved from https://www.healthcare.gov/why-coverage-is-important/protection-from-high-medical-costs/ Accessed August 23, 2021. | 6. “Topic No. 751 Social Security and Medicare Withholding Rates.” IRS.gov. Retrieved from https://www.irs.gov/taxtopics/tc751 Accessed August 23, 2021.

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