The program has also been enormously successful in narrowing the healthcare gap between rich and poor, and between whites and minorities. It’s fair to say that traditional Medicare – the fee-for-service program that allows beneficiaries to use almost any doctor or hospital in America still remains strong, but like most large government programs it isn’t perfect.
Throughout its history, Medicare has been expanded to cover more people. In 1972, Congress extended Medicare to the permanently disabled (who make up about a sixth of the enrollees) and people of all ages with advanced kidney disease.
The retirement of the baby boom generation will add millions of beneficiaries to the Medicare rolls. And, thanks to Medicare, retirees are living longer. Today, men at age 65 have an average life expectancy of 18.1 years, and women at the same age have an average life expectancy of 20.7 years. The number of people in their 90s is projected to quadruple by 2050.
The 2010 Affordable Care Act (ACA) expanded Medicaid coverage to childless adults and families earning up to 138 percent of the federal poverty level. But most people are unaware the ACA also strengthened the Medicare program. Specifically, the law gave Medicare beneficiaries wider access to many free preventive services, and was responsible for eliminating the infamous “donut hole.”
It doesn’t matter what a person’s income, medical history, or health status was. Medicare was created to be a social insurance program available to older adults over 65 and certain people with disabilities who are under age 65.
Today, there are more than 63.1 million beneficiaries enrolled in Medicare. The majority of beneficiaries have traditional Medicare, but Medicare Advantage (MA) is gaining in popularity and is here to stay. Over the years, traditional Medicare has been remarkably resilient. Under the guise of “reforming” Medicare, the program has survived repeated attempts by politicians to undermine, if not eliminate, it altogether.
Medicare has protected millions of Americans from financial hardship. Before Medicare came on the scene, 33 percent of all older adults lived in poverty. Today, Medicare has cut that number in half. Medicare is also more efficient than private insurance with administrative overhead costs of around 2 percent when compared to about 20 percent for private insurers.
Medicare coverage has continued to evolve, albeit at a slower pace. In 2006, beneficiaries could sign up to Medicare Part D prescription drug coverage. Over the past decade, enrollment in MA plans has grown significantly. Today, there are roughly 26 million beneficiaries enrolled in MA plans, now accounting for 42 percent of the total Medicare population.
The average beneficiary now has access to 33 MA plans, the largest number of options available over the last decade. Nearly two-thirds of beneficiaries enrolled in MA plans have prescription drug coverage (65 percent) included and they pay no premium other than the monthly Medicare Part B premium. Some low-income beneficiaries pay nothing if they are eligible for one of the Medicare Savings Programs. Now, Medicare isn’t perfect. It has its shortcomings. Since the Part D program was created, Medicare has not been able to negotiate drug prices with pharmaceutical companies, unlike the Veterans Administration or Medicaid. Last year, House members passed H.R. 3: Lower Drug Costs Now Act. Unfortunately, the proposed bill languished in the U.S. Senate. If H.R. 3 had passed, the Medicare program would have been strengthened for future generations and, according to some health policy experts, could save taxpayers $500 billion over the next 10 years.
When Medicare was enacted, life expectancy was considerably lower than today. Policymakers weren’t concerned about esoteric things like dental, vision and hearing benefits. Yet each of these benefits are instrumental for good health and longevity. One study in the Journal of Health Affairs last year noted that poor oral health limits a person’s ability to eat and speak, and can cause higher rates of diabetes, cardiovascular disease and pulmonary infections. Similarly, vision loss can be associated with a higher risk of falls, depression and cognitive impairment. People with hearing deficiencies is also associated with dementia, falls, depression and higher rates of hospitalization. Story continues below video
Nearly two-thirds of all people on Medicare lack dental coverage, according to the non-partisan Kaiser Family Foundation. In the past, traditional Medicare would only cover dental in very limited circumstances and if deemed necessary as part of a covered procedure. Unlike traditional Medicare, most MA plans do offer many of these benefits. But it tends to be skimpy, especially dental coverage. Most MA plans cap their annual payments anywhere from $500 to $2,000. In today’s world, that won’t get you very far. Long-term care is another unmet need in the Medicare program. Medicare rarely covers custodial care by itself. And while Medicare does cover some skilled nursing care it also is fairly limited. AND THEN CAME COVID-19 …
The Medicare trust fund – the fund that finances health services for Medicare beneficiaries – has also been unfavorably impacted by COVID-19. The Center for Budget and Policy Priorities points out that widespread unemployment caused by COVID-19 will reduce payroll taxes, the main source of income for the Medicare trust fund. Many people are concerned that Medicare will be unable to sustain itself as the baby boom generation comes on board. The Congressional Budget Office projects that the Medicare Part A Hospital Trust Fund will run out of money by 2026. Historically, Congress has always came through to maintain the solvency of the trust fund; however, things may be different this time with a sharply divided Congress.
Racial and ethnic disparities among Medicare beneficiaries are well documented; COVID-19 has deepened these divides. Black beneficiaries are more likely to contract COVID-19 and up to four times more likely to be hospitalized than white beneficiaries. Not surprisingly, the pandemic has resulted in the biggest drop in life expectancy among all Americans since World War II. The COVID-19 pandemic has disproportionately affected Medicare beneficiaries and has exacerbated existing fault lines within the program. Medicare beneficiaries are at a higher risk of death or hospitalization. COVID-19 has limited access to in-person care, contributed to behavioral and mental health declines and created additional financial struggles for beneficiaries.