Public To Budget Hawks: Don’t Touch My Medicare

Debate about Syria has pushed federal deficit talks to the back burner this month…but it won’t be long before we hear another plan to trim Medicare spending.  So politicians beware!  A special report in the New England Journal of Medicine says most Americans strongly disagree with experts who say Medicare is a major part of the federal budget deficit. And, this group of reliable voters say they’ll go to the polls to defeat candidates who support Medicare cuts.

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These conclusions are based on a poll out of the Harvard School of Public Health and an analysis of seven other national polls from earlier this year.  They show big differences between public opinion about Medicare’s budget and what we hear from experts.

First, most Americans believe Medicare is paid, in full, through payroll and premium contributions.  Wrong, say experts. The government pays $2 of every $3 spent on care.

Second, while experts say excessive tests, new drugs and technology are sinking Medicare, those polled blame poor management, fraud and excessive hospital charges.

And Americans do not support giving doctors a fixed payment and letting them manage money for a patient’s care, a cost-saving option backed by many experts.  63% of these respondents believe Medicare is already trying to save money by withholding treatment and prescriptions patients request.

It will be hard for politicians to try to correct or discuss public misperceptions about Medicare, says Robert Blendon, a co-author of the analysis and professor of health policy and political analysis at Harvard School of Public Health.

But, says Blendon “if we’re going to resolve some of the Medicare issues in the future, there has to be a better understanding, otherwise many candidates are going to find themselves losing votes by talking stands that appear to be the right thing from an expert point of view.”

I wonder how these opinions among Medicare members are playing out in the doctor’s office? Anyone have a story to share?

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  • http://byrondennis.typepad.com/theabcsofmedicare/ Dennis Byron

    This unsourced article says:

    “First, most Americans believe Medicare is paid, in full, through payroll and premium contributions. Wrong, say experts. The government pays $2 of every $3 spent on care.”

    Well aren’t we seniors a bunch of ignorant old codgers? But in this case the experts are more wrong than we seniors are from two perspectives:
    (1) based on the original Medicare proposals from 1957 through passage in 1965 and
    (2) depending on the age of the person on Medicare.

    The experts are trying to change history and mathematics to suit their own ideology.

    First perspective: Here’s how LBJ described Medicare on March 26, 1965:

    “Now, here is how the plan will work. During his working years, the worker pays about $2.50 a month. This, plus a similar amount from his employer, will provide the funds to pay up to 60 days hospitalization for each illness. It also provides adequate nursing home care. For $3 per month after he is 65, he also receives full coverage of medical, surgical, and other fees whether he is in or out of the hospital.”

    It’s the worker and the employer “providing the funds,” says LBJ; nothing about the government. What the government said it would do out of general funds (not $2 out of $3) is provide the same coverage for low income seniors (which it was already doing through many mostly state programs) and provide for a transition period covering people who had never paid into Medicare because the program didn’t exist. (Someone who really wants to get down in the weeds on this also needs to separate Parts A and B and understand why they are different and their different legislative journeys.)

    As the different histories of Medicare clearly point out Medicare was supposed to be classic “social insurance” (so was Social Security; the experts screwed that up too) which includes — from a financing point of view:
    “a.) contributory finance, with most or all of the resources required to run the program raised through explicit contributions, and
    b.) eligibility (but not benefits) derived from contributions,” which is a fancy way of saying the actuaries do not have to figure it out to the nickle (see http://www.ssa.gov/history/pdf/ThirtyYearsPopulation.pdf)

    For the second perspective, fast forward almost 50 years. It was stated during the 1957-1965 debates and may actually be in the law in some way that the government would keep the payouts and income in balance (actually that was a kind of a given for everything back then). The idea in theory was that “the government” would cover the costs less and less as the people who never paid in or didn’t pay in fully died off and those that started working around 1965 and had paid in for a full 45-50 years came into the system. Those paying into the system from its beginning would have in theory — AND HAVE IN FACT — paid their own way (at a lot more than LBJ’s $2.50 a month of course), counting the payroll taxes they paid for 50 years (Part A), the income taxes they paid for 50 years (Part B), and the premiums paid into the trust funds even after retirement (also Part B).

    Originally that continuing premium amount was supposed to cover 25% of the Part B costs but somewhere along the line it got down to 15%. President Obama has proposed restoring the higher 25% cost sharing for all seniors who don’t otherwise get “free” Medicare. (“Free” is in quotes because even seniors who today get their Medicare premiums paid for by Medicaid still most likely paid into the trust funds during their lives via work.) Did Harvard put the fact that Obama is leading the movement to increase senior co-pays into their survey?

    In other words, whoever wrote this puff piece for the Harvard guys, tell those experts they’re full of it. We seniors think that it’s paid for by us — not the government — (1.) because that’s what LBJ said would happen and (2.) because that is in fact has happened financially for those of us seniors now turning 65.

    (It’s also worth mentioning another misconception that get’s thrown around when Medicare history is brought up. 57%-60% of seniors had some kind of healthcare insurance at the time Medicare was passed. But at that time only about 70% of non seniors had health insurance. The number of seniors insured in 1965 was not this catastrophe that revisionists like to portray the same way they portray this lie about the “government” pays for Medicare.)