This is part of a column running in the November issue of The Business Monthly serving Howard and Anne Arundel counties.
By Len Lazarick
Len@MarylandReporter.com
I got my Medicare card in the mail last month. I had some chagrin at reaching the age to qualify for Medicare, and I had been procrastinating about applying.
It was five days into the federal government sort-of-shutdown on a Saturday morning that I went onto the Social Security web site to apply for part A, which covers hospitalization. I knew that some units of the Social Security Administration (SSA) were supposed to be working.
This unit clearly was. I quickly filled in my information, submitted the data and promptly got back an e-mail from www.ssa.gov: “We hope you found our online Benefit Application convenient to use and easy to understand.”
Thank you. I did.
Two weeks later I got the card in the mail. I got other notices independently from the Centers for Medicare and Medicaid, also headquartered in Woodlawn. Independently, I even got a notice from Social Security concerning a private pension I qualified for, in case I hadn’t been contacted by the Washington Post. (I already had been.)
Feds Are Not Incompetent
The point is that the federal government does indeed know how to run some health insurance programs efficiently. Of course, it has had 47 years to master Medicare.
The SSA has always taken great pride in how well it delivers benefits. At least, that was true when I worked for what was then the Bureau of Health Insurance 39 years ago, which later spun off into CMS.
BHI ran Medicare, which even then was a cumbersome, complicated program with a big, bulky bureaucracy. It is even larger and more complicated now, and it is likely going broke in the next decade because we have not found a good way to get control over health care costs. People are living longer because of better public health, improved health care and access to that care — via Medicare.
It is helpful to remember the history of Medicare, a government program run by many of our neighbors, as we contemplate the disaster Obamacare implementation has become, which may or may not be temporary.
Medicare was a controversial program at its start, opposed by doctors. It has grown more complicated as Congress added benefits and coverage. But “don’t touch my Medicare” was the cry from all sides of the political spectrum, as the Patient Protection and Affordable Care Act (ACA, a.k.a. Obamacare) was being passed.
A government program for everyone over 65
Medicare is a universal coverage program run by the government, paid for by taxes on the entire working population. It has the same benefits for everyone and health insurance companies administer the benefits as contractors. (Beneficiaries can buy more enhanced coverage on the open market.)
Medicare is the epitome of what many free-market conservatives are opposing for the rest of the population; Obamacare got so complicated partly because of this opposition, and the lobbying by the insurance industry and health care providers.
The flaws in the ACA were obvious from the get-go. There were too many moving parts, too many goals, too many conflicting rules, too many provisions so open-ended that only bureaucratic regulations could untangle them. Now we’re seeing how difficult other aspects of ACA are to implement.
The political fallout from the mess that Obamacare has become is that it reinforces the notion that the federal government is ill-equipped to manage any health benefits program that serves the entire citizenry.
The experience of Medicare, for all its flaws and the fraud perpetrated on it, says that is not true. It is better, however, to start out with a simpler plan that covers everyone.
After 48 years it should be running smoothly! But Medicare too had serious glitches at its debut in 1965 including some of the same things we’re seeing with the ACA. I know because, at the time, I worked for the Social Security Administration as a claims representative in a district office. To quote Stephen Mihm, an associate professor of history at the University of Georgia, in a Star Telegram article of 10/16/13, “there are rumblings that the glitches attending implementation of the Affordable Care Act — along with the relentless campaign to sabotage or delay it — mean the program is dead on arrival. But the history of an equally controversial and vast government effort, Medicare, indicates that predictions of Obamacare’s demise are greatly exaggerated…….In the end, the nation’s healthcare system weathered the crises, the government and private insurers worked out most of the kinks, and by the late 1960s the system was working reasonably well.”
Read more here: http://www.star-telegram.com/2013/10/16/5252620/medicare-program-also-plagued.html#storylink=cpy
Thank you for pointing out the ridiculous nature of creating a system from scratch that is so complicated simply because the design is intended to maximize profits for the health industry……period. We do want to mention that the Medicare for all states that we need to expand and IMPROVE Medicare as it now only covers 80% and it does indeed lose 1/2 of spending to fraud. Simply building oversight and recovery will take care of that. Maryland has National Physicians leading the way with Universal Care!
Dennis: I was surprised that SS cut my check that much also. However, when I checked it they first said, that was my first check, it would go up the next month. Well, when it did not go up, I called again and this time, I was assured it was correct, and who ever told me the check would be more the second month was mistaken, I would not be receiving anymore than the $670. I asked to speak with a supervisor and she informed me she was the supervisor, I had my explanation and that was all they could do for me. Today, I draw $841 per month, after I think it is 7 years.
I am grateful to have my great grandchildren, they keep me busy, which is a good thing. My doctor says they are keeping me young. lol But I am raising them, the oldest one will be 15 in two weeks, I brought her home from the hospital at 2 days old. My second child is 3, I have had him since he was 8 weeks old. They are good kids, but of course, they are spoiled too. I had not planned to spend my retirement raising more children, but we just never now what God has planned.
Thanks for the information on Obamacare. Government has never been involved in anything that they did not screw up. Someone said recently, if the government was in charge of the desert there would be a shortage of sand within 5 years. And I believe that. I personally think, we had the best health care system in the world anyway. The biggest problem with it, I think was mismanagement , excessive law suits and not enough honest oversight. I honestly think, the only thing wrong with Medicare and Medicaid is mismanagement and allowing all of the illegals in the country. However, Congress should never have been allowed to touch the funds either. They should have been invested and both medical and SS would be solid, allowing for a more decent percentage monthly payout to the retirees.
When I listen to these educated politicians talk, it really grates on my nerves, as they lack any common sense at all.
Hope you have a great week, it was nice hearing from you.
As someone who DREADED signing up for and dealing with Medicare, I would second your observation that the process was wonderfully smooth. I have also had cause to deal with Medicare Part D for an elderly relative and found that online tools were very well-designed and helpful. After several years of experience with Part B myself, I have found that 95% of the time it is efficient and works smoothly, providing excellent citizen service. The stress of dealing with the other 5%,, though, probably takes as many years off my life as the medical care adds to it. First, as long as your situation fits whatever the regulation envisioned, you’re in good shape. If you don’t quite fit the model, you are completely out of luck. In my private health insurance, there is normally some route of appeal, and I have always been able to have reasonable service or products covered that way. With Medicare, the answer is “Our regulation says X”, and that is the end of it. They have been completely unresponsive to any suggestion that the regulation did not quite envision all possible circumstances or to a request that someone review the regulation. Second, Medicare brags about its low administrative costs. That’s because they shift the burden to the providers and patients! I can give specific examples of both of these, but this post is getting too long already.
It is these two problem areas that make me very reluctant to have the government increase its role in health care. I completely agree with your contention that Obamacare (or any successor programs) should look at Medicare to see what can be learned from their successes. However, I think it I essential that they also address the problems of rigidity and bureaucracy in all of the programs, including Medicare.
Twice above, you say “efficiently.” Do you mean the dictionary definition (achieving maximum productivity with minimum wasted effort or expense) or are you conflating with “effectively”?
Medicare and Veterans’ Administration health-benefits programs are riddled with inefficiencies. Each year GAO issues about a dozen reports describing anew the inefficiencies and waste in these programs. Some even claim overhead is far lower compared to private-sector benefits administration, a ridiculous claim; the direct cost of these programs are accounted for in CMS (and VA) appropriations, but the indirect costs to run CMS reside in the Federal “central-service” agencies, such as Treasury, OMB, OPM and countless others.
Dear Mr. Lazarick
Apparently, because you said you were only applying for Part A, you either use the VA or are still working and getting coverage there or are getting insurance from a Washington Post retiree plan (but I would think they would still want you to get Part B) or are getting your supplemental coverage from a spouse or are very rich or … (there are a few other possibilities)
But saying…
“(Beneficiaries can buy more enhanced coverage on the open market.)”
… in parentheses is very misleading. Enhanced “free-market” coverage is not the afterthought you imply with your dismissive parens. Over 85% of us on Medicare are not in one of the categories you must be in and we all are forced to buy “enhanced coverage” because Medicare is such lousy insurance (no catastrophic coverage, no annual OOP limit, no drug coverage, no annual physical, high co-pays for hospitalization — but not compared to Obamacare I admit — and high co-insurance for everything else, no coverage outside the U.S., no dental, no vision…). Another 20% of us are forced to go on Medicaid. Only a few of you elites can avoid “enhanced coverage on the open market.” The numbers add up to more than 100% because many people on Medicaid even buy “enhanced coverage on the open market.”
That of course makes your next sentence totally false. You say:
“Medicare is the epitome of what many free-market conservatives (should like).”
No it’s not. In a free market, we would not be forced to pre-pay for crappy government insurance for 45-50 years just so we could pay for more insurance on top of it once we retire and still get only half our medical costs covered. Clearly in your beltway navel-gazing bubble, you have no idea what it is like in the real world that the rest of us live in.
Dennis, you are so right. And that enhanced “free-market” coverage ends up costing at the least $150.00 per month for almost no coverage at all. Medicare plays with everyone, I had to take early SS retirement due to kidney cancer, when all was said and done, thank God my doctor managed to cut out all cancer and remove kidney, I could not continue working, SS denied me disability, took $430 a month out of my retirement due to the 1 year early retirement, which left me with $670 per month to live on, due to 1 year early retirement. I can not even afford to live alone, much less “enhanced coverage”. I started working at 14, had worked 49 years paying into SS, to end up living under poverty level. My health has been good since the cancer 10 years ago, which I am grateful for. Now comes Obamacare, which now says, I am not worth investing in health insurance for, so a panel will decide what happens to me now. I never made a 6 figure salary, never made over $35,000 a year, but managed to raise my family, now am watching children after school, so I can manage to finish raising my 2 great grandchildren. Actually my only complaint is, the pay scale for SS could be reasonable for all of us who worked and paid in, if the illegal aliens were not being paid from our benefits and if Congress did not dip into our contributions. Those funds should have been invested, years ago. That truly upsets my soul. My feeling is, government screws up everything it touches due to GREED!
karolh
First I am happy the operation was successful. Everything else is something that can be worked around. It’s a little unclear if you are watching your own great grandchildren (which can be fun in doses) or someone else’s (not so much, I would guess)
What I don’t get is your statement that SS cut your payment by almost 40% because you “took retirement” one year before so-called Full Retirement Age (FRA). For some one whose FRA is 66, we can collect at 62 and only have the monthly benefit “cut” 25%. If we wait until 63, it’s “cut” 20%; 64, 13%.etc. I don’t understand a circumstance where your SS would have been “cut” 40%.
By the way, I put “cut” in quotes because people who actually think about it don’t look at it that way. They — correctly from a financial planning point of view — look at SS as follows: I can get $x a month at 62, $x + 10% a month at 63, $x + 15% a month at 64, etc. Then you figure out whether it’s worth continuing to work and how long you think you’re going to live and a few other lifestyle things… and it pretty much works out that you’re ahead of the game taking the SS money “early” unless you make a lot of money and/or know you are going to live well into your 80s.
(Also, don’t worry about Obamacare affecting you. I come from Massachusetts. What none of the politicians will tell you is that RomneyCare was a colossal failure here and was effectively repealed a few years after it was passed. Obamacare will end up getting repealed also.)