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Medicare Becoming Too Pricey, Critics Say
By Bill Cahir, Gloucester County Times
October 3, 2005
Medicare is supposed to be the affordable health care program for the elderly and disabled. But it's getting pricey, and it's not paying doctors the proper amount for services delivered, critics say.
Adjusting for inflation in the health care market, the Bush administration will boost the Medicare premium by $10.30 next year, to $88.50 in 2006. That's an increase of 13.2 percent in one year, and a 77 percent increase since 2001, when the Clinton administration last set the monthly Medicare fee at $50 per month.
"That really takes a bit out of your monthly budget. That type of increase is really difficult for some folks to manage," said Karen Davenport, director of health policy at the Center for American Progress, a Democratic think tank.
Beneficiaries pay the Part B premium to be eligible for outpatient health care services, like regular visits to doctors, diagnostic services and preventative services like cardiovascular tests.
The elderly and disabled will have an opportunity to enroll in the new Medicare prescription drug coverage plan starting Nov. 15. The federal plan will start providing coverage Jan. 1.
Premiums for the Medicare Part D prescription drug program will range from $27 to $68 each month, according to Aetna, one company that will provide the new coverage in New Jersey. The average plan will cost $32, according to government estimates.
Senior citizens -- paying $120 or more to qualify for regular Medicare each month and for the prescription drug assistance as well -- also will be required to pay deductibles before coverage kicks in.
The Medicare Part B deductible will rise from $110 to $124 next year. The prescription drug deductible will vary according to the type of plan that Medicare recipients select. The average will be $250, according to the federal government.
Out-of-pocket expenses could rise even further if GOP lawmakers get their way. Members of Congress hoping to pay for the Hurricane Katrina relief effort are eyeballing even higher Medicare fees for enrollees.
The Republican Study Committee also proposed to increase the Part B premium that seniors pay to enroll in the regular Medicare program. The group would increase the premium to have retirees pay 30 percent of Medicare program costs rather than 25 percent of all Medicare Part B expenses.
Republicans described the proposed hike to the monthly Medicare fee as a cut in federal spending. They claimed it would reduce government outlays by $4.65 billion in one year and by $33.5 billion over five years.
But raising the Medicare Part B premium constitutes a tax increase on senior citizens and should not be considered a spending cut, according to health care policy experts.
"There's about as much chance of that being enacted as there is of George Bush resigning for his performance as president," said Henry Aaron, a health care policy analyst with the Brookings Institution.
U.S. Rep. Robert Andrews, D-1st Dist., said, "It's a totally unfair proposal - typical, but unfair. Here's a group of people who are proposing that retired people pay more for their health care, but we couldn't possibly scale back tax cuts for people who are making more than a million dollars a year. It's unconscionable."
House conservatives also have proposed higher co-payments for Medicare services.
For instance, Operation Offset, their spending cuts aimed at paying for the Hurricane Katrina relief program, would require Medicare enrollees to pay a 10 percent out-of-pocket fee for home health care.
U.S. Rep. Frank LoBiondo, not a member of the Republican Study Committee, refuses to endorse the group's proposed spending cuts and fee hikes for Medicare recipients.
"There are several ideas on how to pay for the rebuilding of the Gulf region and I will be reviewing each one closely to see if any of them make sense," LoBiondo, R-2nd Dist., said.
The American Medical Association complains that, although the Part B premium will go up 13.2 percent next year, payments to doctors will be cut by 4.4 percent.
Higher Medicare costs can be attributed to rising enrollment and longer life spans, according to the doctors' group.
The government has aggravated the problem, the AMA contends. Medicare has expanded its coverage for more than 80 diagnostic tests and medical treatments since 1999, the association says.
"Without intervention by Congress and the (Bush) administration to stop the scheduled physician payment cuts of 26 percent over six years, Medicare patients' access to physician services will be in serious jeopardy," Dr. J. James Rohack, a spokesman for the AMA, said.
Ron Pollack, executive director of Families USA, a group that represents health care consumers, recommends that lawmakers revisit the prescription drug program.
He says members of Congress should eliminate a provision blocking Medicare from negotiating price discounts with drug companies. Other government agencies, including the U.S. Department of Veterans Affairs, already bargain with drug makers.
"The new Medicare legislation which is about to go in effect offered a boondoggle of benefits to the special interest groups, most notably the prescription drug industry and the insurance industry," Pollack said. "There are no meaningful price controls on prescription drugs. And the insurance companies won a huge windfall in inappropriately high payments to them. Those are the things that cry out for change."
Families USA last month released a study that found that the federal health care system for veterans, which does seek price discounts from drug makers, pays less than Medicare for 49 out of 50 drugs analyzed for the report.
For instance, Medicare will pay $730.56 for one year's worth of Lipitor, the drug that controls cholesterol levels. The veterans' health care system will pay $498.84 for the same annual dose. The $231.72 difference will represent a 46.5 percent premium for Medicare recipients.
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