Obama & The Potential Impact on Medicare

Introduction President Barack Obama announced recently that in his effort to cut our nation’s deficit, he wants to cut $248 billion from Medicare over the next decade. This would approximately be a 4% cut to Medicare’s $6.3 trillion projected budget over the next 10 years.

Higher Premiums for Middle and Upper Classes Starting in 2017 Beneficiaries would not have to make up the difference at first. Drug companies, hospitals, and insurance companies would cover it for a while. But starting in 2017, middle and higher income Americans would be paying higher premiums. However, beneficiaries would only be paying $24 billion out of pocket and the rest would still be coming from the drug companies and health care providers.

Obama’s Two Choices President Obama has two choices: He either makes older Americans pay higher premiums in the near future or he could step up the fight against Medicare fraud and abuse cases. Lets take a look at the benefits of either choice.

Stop Constant Unnecessary Procedures In this day and age, doctors and hospitals love getting paid so they tend to do more tests and procedures than are considered unnecessary in an effort to plump up their bottom line. It’s all about volume for them. The more they do, the more they get paid. So Medicare should stop paying for these unnecessary treatments.
But not all medical professionals are in it for the money. Some have launched advocate groups hoping to sever the connection between medical professionals and the big name drug and medical supply companies. Even so, this is a lot easier said than done.

Step Up the Fight Against Medicare Fraud Did you know that according to the FBI, up to 10% of health care spending is lost to Medicare fraud? That means 50 billion a year! If President Obama were to fight Medicare fraud and if he were able to save that $50 Billion a year, he would have saved more than double the amount he’s trying to cut over the next decade. That’s half a trillion dollars! When he passed on health care reform, it gave $350 million over the next years but that isn’t much compared to how frequent and for how much is taken away from the budget.

How Does This Affect Me? a. It won’t affect anyone just yet. But it will eventually though, if the President and Congress don’t come up with any other strategies to lower the nation’s deficit, then Medicare (and many other programs) will be put on the chopping block. If this turns out to be the government's course of action, then Medicare beneficiaries will begin paying higher premiums in 2017.
If you would like to learn more about Medicare, then be sure to visit ThirdAge’s Medicare Guide for more information.