I was at the Association of Health Care Journalists in Atlanta last week. Friday morning, three Medicare experts talked about its future and the almost inevitable rise in costs to its recipients -- something that will affect everyone's retirement planning.
Tricia Neuman, senior vice president and director of the Program on Medicare Policy at the Kaiser Family Foundation, offered these numbers that put the impact of any increase in perspective:
- Most Medicare recipients live on less than $85,000 a year. More than 50 percent have incomes less than $25,000 a year.
- Medicare recipients aren't living on their enormous retirement savings accounts either. Only 5 percent have more than $1 million salted away. About 50 percent have less than $50,000 in their retirement savings.
There are occasionally calls for making up any shortfall by charging the wealthy more. It sounds good, but the reality is only 5 percent of Medicare recipients have incomes of $85,000 or more. And those recipients are already paying a premium.
Part B Medicare fees are free for people who earn below the poverty level -- about $12,000 for an individual. Otherwise, the fees are $99 a month for those with incomes under $85,000. Above that, the fees are graduated with singles who earn more than $214,000 or couples making greater than $428,000 paying the top rate -- $319.70 per month.
Robert Moffit, a fellow at the Center for Policy Innovation for the conservative Heritage Foundation, called for changing the Medicare payment system to one based on vouchers. Each recipient would receive a flat amount that could be used to buy private insurance. He said such a change would do three things:
- Guarantee seniors access to a wide variety of plan options and benefits.
- Reduce costly micromanagement that undercuts efficiency.
- Slow the growth of Medicare spending through competition.
At the other end of the philosophical spectrum, Henry Aaron, senior fellow at Brookings Institution, pooh-poohed the notion that a voucher system was a good idea, in part because 25 percent of Medicare recipients have cognitive disabilities, like Alzheimer's, and aren't able to make smart decisions about insurance purchases.
He also pointed out the impact of health care reform on Medicare. The Affordable Care Act calls for making Medicare more efficient. "I believe system reform holds out tremendous hope, and a positive outcome from the legal challenge to The Affordable Care Act is absolutely critical for the outcome of Medicare," Moffit said.
In an earlier conference session, former U.S. President Jimmy Carter was asked his opinion of The Affordable Care Act and the possibility that it will be overturned by the U.S. Supreme Court.
"I don't know," said the 87-year-old Carter. "I'm not in charge anymore. But I would say there's a lot of propaganda going on. Republicans and certain talk shows have misled the American people about it.
"I preferred a single pay plan, or 'Medicare for all.' It would have been much simpler, and it was promised previously by President Obama. He bowed under pressure, which I understand. But it didn't happen. And I'm not confident that the Supreme Court will make the right decision on the health law. If they strike it down, we'll have to start over, and more people in this country will end up suffering," he said.