How Medicare Gets It Right and Wrong

Why do seniors who need health insurance the most pay more than those who don't?

Senior's hands
mrmohock/stock.adobe.com

Even if you aren't of Medicare age yet, at some point, you're going to reach it, and this is going to matter. Fix it now, and you won't be angry later.

The question is, why do seniors who need health insurance the most pay more than those who don't? You might think, "Well the people who use insurance the most should pay the most. If you have multiple auto crashes, your premiums go up. The same logic should apply for Medicare."

Except I could argue that, even for car insurance, that's not an efficient model. Bad drivers should be penalized through government intervention using a competency index, rather than via a profit model, which disproportionately harms the poor and is implemented by private industry. Insurance is about pooled risk, but somehow the Ayn Rand in us decided decades ago that you should be financially punished if you wreck your car, if your house burns down, or if you live with a chronic disease.

I would also argue that health care is a right. Driving and owning property is a privilege. Regardless of the market forces controlling other types of insurance, health insurance (and especially Medicare) doesn't have to be this way and the proof lies within Medicare itself — Parts A and B.

Medicare Part A is an excellent example of proper insurance. It covers 100% of your hospital stay. Everyone, working and retired, pays a premium. Employers pay a premium too.

Medicare Part B is a good, but not excellent, example. It's paid for the same way as Part A. It covers physicians, but there is some patient cost exposure. That's why it's recommended that you purchase a Plan F (or G, N, C) policy as a supplement, also known as medigap, which brings your doctor cost to zero.

Medicare Part D, however, which covers prescription drugs, is 100% the wrong model. Despite having working examples (Parts A and B) of how to structure Medicare correctly, legislators created a monstrously unfair prescription drug plan during George W. Bush's presidency.

Part D covers every cheap drug but leaves seniors financially exposed for the expensive ones. Essentially, the more expensive the drug, the less coverage you have. Luckily, there are very few of us who can't afford to spend a few dollars for our generic cholesterol or blood pressure drugs. Yet there are also very few of us who can afford the copays and co-insurance for a drug that treats a chronic illness. This could add up to thousands of dollars a year.

Welcome to retirement and the grossly unfair and cruel Medicare Part D.

Rather than using a pooled risk model, where everyone would pay a bit more for their $4 cholesterol drug or to their premium to help provide better coverage for expensive drugs, Medicare Part D provides solid coverage only for common, generic drugs. If you are lucky enough to be able to treat your illness with a generic drug, then you may manage to skate by.

If, however, you're unlucky enough to have a hereditary condition that is treatable but not curable, your financial stability flies out the window at a crucial point in your life when you're likely living on a fixed income and unable to absorb extra costs. Too bad for you. Ayn Rand wins.

Seniors with chronic conditions and Part D insurance can still pay more than $4,000 a year in additional fees simply to obtain a drug that keeps them alive and mobile.

The solution I mentioned earlier, however, is like legislative kryptonite: Increase premiums a bit for everyone so the unlucky ones don't have to skip medications, food, rent, utilities and clothing just to be able to afford a life-saving drug.

Since the 1980s when Reaganomics began paving the way for the 1% class and began paralyzing the wages of the evaporating middle class, the false notion of "pay-as-you-go" as a viable health care delivery system has prevailed. The United States is the only country in the civilized world that provides quality health care only to those who can afford it rather than providing it — at least to some extent — universally in return for everyone paying their fair share.

The idea that healthy working people complain about a few extra dollars going to Medicare — or that healthy people have the gall to actually complain when seniors are going without care — is anathema to our notion that we are the best country in the world.

It's time to fix Medicare Part D. Our foundation, the non-profit Global Healthy Living Foundation, works to amplify the voice of those affected by this issue.

Help fix Part D, because even if you're not a senior eligible for Medicare, I'm betting you're hoping to become one.

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