Medicare is designed to provide senior citizens and other qualifying beneficiaries with affordable medical care, be it on an emergency basis or for regular outpatient checkups. Medicare’s initial design included just two parts, Medicare Part A and Medicare Part B. The former plan covered beneficiaries needs associated with emergency situations and hospital related expenses. The latter covered a more broad variety of situations related to medical insurance and that will be the main focus.
Medicare Part B was designed to provide beneficiaries with medical insurance to pay for a variety of products and procedures not covered under Medicare Part A. Generally speaking Medicare Part B was meant to replace medical insurance for doctor visits, checkups, and costs that could arise out of those situations. This portion of Medicare covers a wide variety of expenses for beneficiaries, including but not limited to the following:
• Physician/Nurse services
• Laboratory Tests
• Diagnostic Tests
• Vaccinations (notably Influenza and Pneumonia)
• Blood Transfusions
Beneficiaries could only have these and other expenses covered under Medicare Part B if a medical professional administered the services during an official visit. Medicare Part B also covers items related to a doctor’s visit that might not necessarily be provided during the visit. Those in need of durable medical equipment are eligible to receive assistance under Medicare Part B for any of the following items:
• Mobility Scooters
• Artificial Limbs
• Breast Prosthesis (following mastectomy)
• Oxygen tanks (for home use)
Medicare Part B coverage is available to all those who are eligible for Medicare coverage; however using Part B is optional. Those who remain active in the work force, or have a spouse that is actively working, may defer Part B coverage. In the event the coverage is declined, beneficiaries face a 10% per year lifetime penalty for not enrolling in Part B.
Much like Medicare Part A, Part B coverage does not fully cover the medical expenses of its beneficiaries. There are out of pocket costs involved for those who are eligible such as premiums, deductibles, and co-payments. Every individual with Medicare Part B coverage pays a monthly premium for the insurance coverage they receive. As of 2009, monthly premium payments cost $96.40. As of 2007, the federal government instituted a new system for determining the monthly premium payment based upon income. The new premium rate affected those making $85,000 as individuals or $170,000 for married couples, with those making higher incomes paying higher premiums. As of 2009, there were four possible income brackets and corresponding premium payments:
• $308.30 (maximum possible premium for those making more than $213,000/$426,000
Medicare premium rates for Part B remained unchanged heading into 2009, marking just the sixth time since 1965 that rates went unchanged from one year to the next. To make life easier for individuals receiving Medicare Part B, the premium is removed automatically from their Social Security checks each month.
Deductibles work differently under Part B than under Part A. Once a beneficiary has paid out the deductible amount of $155.00 in a year, a require fee of 20% will be charged on all Medicare-approved services provided under Part B. Most lab expenses are an exception as these are covered 100%. If individuals use medical services from a provider not approved by Medicare they must pay 15% of the cost of the services provided.
Reimbursements to physicians under Medicare Part B have undergone a lot of changes since the insurance program was created in 1965. When the program started 45 years ago, physicians were allowed to bill beneficiaries for their services and Medicare would reimburse the individual. This allowed physicians to bill in excess of the expected reimbursement amount. However, physicians’ fees began to quickly outpace the amount that beneficiaries were being reimbursed. In 1975 the government tried to limit fee increases, and given the extreme increases from 1984-1991; the federal government began to determine yearly fee changes by legislation. Strict legislation from the government in recent decades has resulted in many physicians not being reimbursed enough for the services they provide to beneficiaries.
Medicare was developed to provide senior citizens in America with reliable and affordable health care. Prior to the existence of a publicly funded insurance program, senior citizens relied largely on organizations such as Blue Cross/Blue Shield to provide them with affordable health care. However, competitors that did not employ the same rating systems of Blue Cross forced prices higher for senior citizens. Rising costs were the reason for Medicare’s development in the first place, and those same costs could become its downfall.
With rising medical costs already putting strain on Medicare, a shifting populace is causing even more troubles for the program. With doctors under Part B already being paid less than the cost of their services at times, things could become worse. As the Baby Boomer generation, the largest percentage of America’s population, approaches retirement age the nation faces a dwindling revenue base to tax in order to fund the program. Currently, there are 3.9 taxpaying citizens to support every individual on Medicare. However, by 2030 it is projected that that number will dip to 2.4 taxpayers to support each individual on Medicare.