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Medicare Crisis Can’t Be Avoided Despite Reforms

Sun., June 29, 1997

Medicare reform.

The furor over enactment fills news pages and the airwaves.

For example, just last Tuesday, the Senate voted to raise the eligibility age to 67 for Baby Boomers and charge the wealthiest beneficiaries higher premiums starting next year.

But what are the facts? Are the changes good or bad for older people? For younger folks? For workers? And what about the rich, who have it in their power politically to undo or redo changes they don’t like?

Chris Carlson is Eastern Washington coordinator of an organization called Statewide Health Insurance Benefit Advisers (SHIBA). If anyone knows the answers to these and other large questions about Medicare and the reform bills just passed by Congress and now in the process of being ironed out, she should.

“The Medicare debate is so overwhelming,” says Carlson. “I don’t have the answers either. But I have some very alarming statistics and some useful information.

“I personally think the general public doesn’t understand yet the crisis we’re in. People don’t realize how much Medicare costs, how rapidly the number receiving benefits is growing, how fast the number of those paying into the program is shrinking, and how the Baby Boomer generation is going to come crashing down on the program.

“And I wonder,” says the independent expert, “if reform isn’t coming too late? Can Medicare as we know it still be saved? It should have been reformed 10 years ago. I think the program in its present form will not be around for my generation.”

Consider, she says, these numbers:

Medicare today consumes 12.2 percent of the federal budget - behind only Social Security, defense spending, and interest service on the national debt.

Just 10 percent of the population accounts for 70 percent of health care costs.

Last year, Medicare spent an average of $5,200 per beneficiary.

New payroll taxes currently fund 5 percent of the annual budget but outgo is 9 percent, creating a net drain of 4 percent.

One in eight Americans today is on Medicare, including the disabled.

In 1935, there were 40 workers for each retiree. Forty to one.

In 1950, the ratio was 17 to one.

Today, it is about four to one.

By the year 2030, it will be roughly two to one.

Apart from the fact of the Baby Boomer phenomenon, the biggest reason for this cataclysmic shift from workers to Medicare recipients is longevity. Not necessarily because people are healthier. But because technology is exploding.

Unfortunately, far too often the expensive technology and specialized training that the Medicare system makes available to everyone are wasted on everyday minor complaints.

“Fully 70 percent of Medicare recipients go to costly specialists for care,” reports Carlson. “Only 30 percent go to a primary care physician. That’s an enormous unnecessary expense.

“Because Medicare will pay you to go to any doctor, anytime you want, many people are abusing the privilege. They are going to a cardiologist (heart specialist) instead of a general practitioner when they catch a cold.

“That’s why, 10 years ago, Medicare started getting into managed care, and Medicare managed care is growing fast.”

Some managed care plans are a nightmare. But a lot offer more care at lower cost and offer additional benefits, such as eliminating copayments and covering drugs costs, Carlson says.

“We walk recipients through the education process so they can make an informed decision about whether to stay with their regular Medicare program and buy a supplemental insurance policy, or choose a Medicare managed care plan,” said Carlson. “We don’t tell them what to do. That decision is theirs.

“But anyone opting for managed care will need to do a lot more front-end work to pick a plan right for them. There can be no closure without a lot of individual effort.”

SHIBA, a division of the Washington State Insurance Commissioner’s Office, has 400 trained volunteers statewide who can help with information. There is no charge. Call 1-(800)-397-4422 for the counselor nearest you.

, DataTimes MEMO: Associate Editor Frank Bartel writes on retirement issues each Sunday. He can be reached with ideas for future columns at 459-5467 or fax 459-5482.

The following fields overflowed: CREDIT = Frank Bartel The Spokesman-Review

Associate Editor Frank Bartel writes on retirement issues each Sunday. He can be reached with ideas for future columns at 459-5467 or fax 459-5482.

The following fields overflowed: CREDIT = Frank Bartel The Spokesman-Review



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