How much will Medicare cost in 2020

US Healthcare: Retiree Health Insurance Under Review

Where is the way going? - Many seniors are unsettled by the US government's health reform plans. They fear for the quality of medical care. Photo: Martina Merten

By 2019, government health programs are slated to be cut by an estimated $ 500 billion as part of health reform. The older generation's fear of cuts is great.

In early 2010, the Mayo Clinic Family Medicine in Glendale, Arizona announced that it was not admitting any new Medicare patients. The clinic management referred those retirees who asked for an appointment to hospitals in the area. According to the local press, 4,000 to 5,000 patients were affected by the new regulation.

What Mayo press spokeswoman Lynn Closway dismisses in retrospect as a “small pilot project that only lasts two years” to save costs within the clinic is being perceived beyond Arizona's borders. After all, the Mayo Clinic's decision is a sign that even effective, world-famous hospitals like this one apparently cannot get by with Medicare payments. The outcome of the Senate elections on November 2, 2010 showed how much the fear of cuts in many retirees had influenced their voting behavior: many senior citizens voted for the Republicans again for the first time - after all, the Grand Old Party had promised to abandon any austerity plans.

Doctors face losses of 21 percent

Medicare, the state health insurance for people aged 65 and over, was introduced under the 1965 Social Security Act under President Lyndon B. Johnson. 46.3 million US citizens are currently covered by Medicare; With the exception of a one-time deductible, hospital stays are initially covered. Medicare recipients can take out voluntary supplementary insurance for outpatient medical services and certain nursing services. The cost for this is between $ 100 and $ 200 per month.

With the rising number of retirees - according to US health scientists, 25 percent of the population will be 65 years of age and older by 2025 - the financial pressure on social security is steadily increasing. Experts estimate that costs will rise by seven percent annually over the next ten years. Already today, an average of 3.9 workers have to finance a Medicare recipient through their taxes, calculates the New York-based non-profit organization “Public Agenda”.

In 1997, the Balanced Budget Act was passed to prevent an explosion in medical treatment costs in the Medicare system. The law tied spending on medical services to a “sustainable growth rate (SGR)”. Since then, a formula has been used to calculate how much Medicare can spend on medical services. If the Medicare expenses exceed the SGR requirements, the fees for medical services decrease accordingly in the following year. "Since the SGR has decreased massively since 2002, but the services of the doctors have not, the income for the treatment of Medicare patients has steadily deteriorated," says Dr. med. Roland A. Goertz, President of the US General Practitioners Association. This year, doctors were threatened with fee cuts of around 21 percent, complains Dr. med. Andrew Carroll. The family doctor from Chandler, Arizona emphasizes that things cannot go on like this. "The SGR urgently needs to be reformed."

Carroll can understand that the Mayo Clinic Family Medicine in Arizona is no longer admitting new Medicare patients. According to surveys, nearly 27 percent of primary care physicians in the US are no longer willing to accept new Medicare patients. In some regions of the country the quota is close to 40 percent. In the US, 91.7 percent of general practitioners still take part in Medicare - 8.3 percent have decided against it. In a brochure, the American Medical Association (AMA) informed its members about possible options: By the end of 2010, doctors could decide whether they want to treat Medicare patients in the future. Because: "The cake is not enough for all general practitioners," says Carroll.

Medicare must be fundamentally reformed

In the course of US President Barack Obama's health care reform, which Congress passed with a narrow majority of Democrats in March 2010, the controversial SGR will not be touched. Instead, Obama wants to counteract rising spending through restructuring within Medicare and cuts in services that are not being effectively provided. From 2011 onwards, for example, remuneration is to be reduced if hospitals and doctors fail to reduce costs through “increases in productivity”. In the long term, prevention programs should also lead to savings in Medicare. A large-scale research study is also examining how alternative payment models can lead to better quality of care and lower costs.

The Republicans see Obama's plans as nothing more than a covert program of cuts. In the run-up to the Senate elections in early November, government health programs such as Medicare and Medicaid are facing savings of around 500 billion US dollars for the poor between 2010 and 2019. The Republican John McCain breaks down 150 billion US dollars in hospitals, hospices and old people's homes alone. Obama's plans mean the end of high-quality care for retirees, predicts the Arizona senator.

According to Prof. Dr. med. Denis Cortese must fundamentally reform Medicare. Occasional cuts or restructuring were not enough, says the honorary president and former chairman of the Mayo Clinic. “Individual performance compensation does not provide any incentive to provide high quality treatment to patients,” adds Cortese, who has been teaching at Arizona State University in Phoenix at the W. P. Carey School of Business since early 2010. Although doctors' remuneration has fallen in recent years, expenses have remained at the same level because doctors have simply performed more services, says Cortese. The Mayo clinics or that of the Kaiser Permanente insurance company, on the other hand, set different priorities: “We believe in a result-oriented remuneration, in 'pay for value'. The amount of the reimbursement depends on the treatment results, the service and the safety of a treatment. ”However, there is still no insurance company in the USA that implements such a reimbursement practice. According to Dr. med. Douglas Wood, a consultant at the Mayo Clinic in Rochester, is currently trying to convince insurance companies to adopt such a system. "At the same time, it is important for us to provide the patient with adequate information - including what he really needs," explains Wood.

Redefine which supply makes sense where

Prof. Dr. Eugene Schneller, an expert in process chain management in healthcare (supply chain management) at Arizona State University, blames another point for the Medicare budget crisis: the variety of offers for patients. "It makes no sense to offer everything to every patient." Politicians, together with health scientists and doctors, would have to redefine which care is necessary where.

So far, the effects of President Obama's health care reform cannot be foreseen. The Republicans, who again hold a majority in Congress after the election last November, have already announced that they will prevent any reform steps. Just a few days after the election results were published, there was talk of a coupon program into which Medicare could be converted from 2018 onwards. According to this, Medicare insured persons should pay additional contributions or switch to cheaper insurance if the social security expenses are above one percent of inflation. The Democrats immediately rejected this proposal as a "privatization attempt".

Martina Merten

Vote against health reform

On January 19, 2011, the US House of Representatives voted with its new Republican majority to withdraw US President Barack Obama's health care reform. However, the vote will not have any consequences for the time being: In the US Senate, the Republicans do not have the required majority to withdraw the reform, and President Obama can stop any decision by Congress with his veto.

245 MPs voted for the repeal of the reform work, 189 against. With the vote in the House of Representatives, the Republicans kept a promise from the 2010 congressional election campaign, in which the rejection of health care reform was one of their main arguments. Three Democrats also voted against the health reform.

The Republicans reject the law, which is considered the largest social reform in decades, because they fear escalating costs and job losses because of the additional burdens on companies. The particular annoyance of the conservatives is an insurance mandate: From 2014 onwards, all citizens are obliged to take out health insurance. Several legal proceedings are already pending against this passage.

Obama offered Republicans to work together to improve reform. However, he declined a complete revision. afp