In a recent workshop, I was asked how “Medicare for All” would work. I quickly replied, “I don’t think anyone knows.”
This topic is in the news today; it’s a popular political talking point. There’s the common perception that it will be like the Medicare we have today and, because of that, it will be great. But, the perceived greatness is likely based on misperceptions about how Medicare works today. Let’s look at some of those myths.
Myth #1: Healthcare under Medicare is free .
Ask anyone currently enrolled in Medicare and you’ll learn it is far from free.
- Part A, hospital insurance: If you qualify for Social Security, Medicare Part A, hospital insurance, will be premium-free. If not, you’ll pay as much as $ 437 a month for the coverage.
- Medicare Part B, medical insurance: Everyone pays the standard monthly premium, which is $ 135.50 in 2019. Higher-income beneficiaries will pay more.
- Part A and Part B cost sharing: Hospital and medical insurance have a lot of “holes” in coverage. For example, there is a $ 1,364 deductible for hospitalization, which covers a 60-day period, not a year. An unlucky soul could pay that three or four times in one year. A person diagnosed with cancer will pay 20 percent of every radiation treatment or chemotherapy infusion. On top of that, Part A and Part B, by themselves, have no out-of-pocket spending limit.
Myth #2: Pre-existing medical conditions do not have an impact on your ability to get Medicare coverage.
To protect against the unlimited costs, beneficiaries enroll in additional coverage.
Medicare Advantage plans must have a maximum out-of-pocket limit, capping one’s liability at no more than $ 6,700 for in-network care. It is true that pre-existing conditions do not affect one’s ability to elect this coverage.
However, many seniors prefer a Medigap policy (Medicare supplement plan). Pay a monthly premium and your out-of-pocket costs drop considerably. The rules provide a six-month window after first enrolling in Part B to sign up for a Medigap policy without medical underwriting. After that time, insurance companies sponsoring these policies can deny an application or raise premiums because of medical issues. (A few states have more generous rules.)
Myth #3: Medicare is a single-payer system .
Taxpayers fund Medicare, primarily through payroll taxes but also premiums for Part B and Part D, prescription drug coverage.
Private insurance companies sponsor and manage Medicare supplement, Medicare Advantage and Part D prescription drug plans.
Myth #4: Medicare is a simple, easy-to-understand system .
After spending years helping people who’ve made countless permanent and costly mistakes, I know that Medicare is anything but simple and mistakes are easy to make. There’s incomplete, conflicting, and contradictory information wherever one turns. Just one Medicare enrollment mistake can prevent a senior from getting necessary medical services and cost thousands of dollars a year.
Those who have Medicare may not perceive it as the best system and those who are not yet there see it as dream coverage. The important thing is that it has been around a long time and takes care of millions of people. Should it be the model for “Medicare For All”? We’ll have to wait and see what happens.