Medicare is a government national health insurance program in the United States, begun in 1965 under the Social Security Administration and is now administered by the Centers for Medicare and Medicaid Services. The problem with the program is how it is administered. The idea is sound, but the application of the program leaves much to be desired.
You have had no control over any of the costs a hospital can charge you nor over what a doctor can charge you. Supposedly the costs have been negotiated by Medicare in order to get the best prices. If you have been paying attention you know Congress just passed a law that allows Medicare to negotiate drug prices with certain limits that can be charged starting in 2023.
Let me give you an example. Part A covers hospital care. If you are 65 or older and you worked for 10 years you don't have to pay for hospital care. There is a deductible of $1,556 in 2022, and $1,600 in 2023. Depending on how many hospital stays you may have in a year you could have to pay many deductibles. If every time you enter the hospital it is for a different reason you could have multiple deductibles. If you are in the hospital for 1 day to 60 days you pay nothing after your deductible. During days 61-90 you pay $389 per day ($400 in 2023). Days 91-150 you pay $778 per day ($800 in 2023). From day 151 on you pay 100% of your costs. If you are in the hospital for 60 days you pay $1,556. For 90 days you pay $13,226 and for 150 days you pay $59,906.
Part B covers Medical Insurance. The cost is $170.10 per month in 2022 and in 2023 the cost is $164.90 per month. The deductable for 2022 is $233 and $226 in 2023. Then you pay 20% of the covered cost. So if you are billed by the hospital $333 for a service you pay the first $233 plus 20% of the $100 or $20. On that $333 bill you pay $253 and Medicare pays $80. From that point on you would pay $66.60 of the $333 bill and Medicare would pay $266.40.
I want to give you an example. My wife was in the hospital the end of September 2022. Because I am a 100% disabled veteran the Veterans Administration covers all the deductibles and the other costs associated with my wife's hospital costs which would normally be paid by me. One of the costs was for a wrist lace-up brace. Not a very expensive item but one I can speak to because I had to sign for it separately. When she was given the brace I was required to sign that if my insurance company wouldn't pay I would pay in its place. The problem was the company supplying the brace was not the hospital but a third party. They had a contract with the hospital to supply the brace. I looked them up and found that they have more than 250 employees with offices throughout the west coast and service 7 western states.
Medicare supplies monthly a copy of how much it pays out for each patient when it has to pay for an item or other cost associated with someone that is covered by Medicare. So when I got the letter telling me what was paid and providing a detailed breakdown of the costs I got upset. The amount charged for the item was $81.00. The amount Medicare approved was $77.11. The amount Medicare paid was $60.46. And the amount I could be billed was $15.42 or 20%. What is the problem? Didn't I get my money’s worth? Isn't the 20% covered by the government? The answer to everything is yes!!!
When I was presented with the document to sign at the hospital there was no cost associated with the document. The PATIENT PRODUCT AGREEMENT & RX FORM had the name of the company that was supplying the brace and the name and type of brace. I found I could buy the brace from Amazon for $25.90. That is 32% of what Medicare was being charged! I called Medicare fraud and was told that there was no fraud because the price being charged is an agreed price that was done through negotiation. Therefore, the price being charged was correct and I was out of line.
I called Champva who is the Federal Government and the payer of the $15.42 which I would have to pay if I was the person having to make the payment. They told me that since they were the third payer there was nothing they could do. The agent at Champva told me that I could file a complaint with Medicare. When I explained I had already talked to Medicare they said there was nothing they could do since they are the secondary payer and I would have to call my Congressman as he would be the only one that could do anything about this ripoff.
I went on the website of the company and input the item number of the item in question. According to the website of the company, the negotiated price was $37.00 for the item not the $81.00 that they billed Medicare.
I don't understand why Medicare won't stand up for the American people! I don't understand why Medicare won't take any action to protect the costs that are being charged to the American people and the federal government by unscrupulous companies and people when they know they are being ripped off! If the people who are in charge are afraid to do their jobs then they shouldn't have their jobs!
Stephen, I agree. The system is just weird. I think there are two big factors at play here that make the system what it is.
First, when I look at what is billed for a routine physical exam, then see what is approved, and then...see what the doctor actually gets paid (a small fraction) you can see that the doctor's company (and they are mostly now companies) is simply playing the game. It's a silly mess. It's no wonder some physicians don't want to accept Medicare patients.
Second, I am sure that there is a staffing issue at Medicare. To ask the agency to carefully evaluate every little item or service on a thorough and systematic basis is probably unrealistic. It should and could happen. But an organization that does its job using only 4% of the funding available has its limitations.
We buy a supplemental plan that handles the deductibles - as the VA does for you. I am relieved to hear you have that coverage. I think it should be automatic for anyone who has put on the uniform and served.
The Medicare subject is mind boggling in its complexity. And I could write a whole letter about the confusion for elders with Medicare Part D (aka part dumb) and the many scams with "Advantage" plans.
And I could write several letters as to why every American should be on something like Medicare. We just had a "non-binding" ballot question in Massachusetts. "Should the Commonwealth establish a state run universal health insurance plan and make illegal all private health insurance companies?" The question passed with a healthy majority saying YES. Keep an eye on MA. The new Democratic governor and Democratic legislature just might set the pace for the US. We will see.
Welcome to the world of Medicare/Medicaid, Stephen. From December 1989 through January 2021 I was involved, first as a County employee Department of Social Services then from December 1989 until December 2003. Then from December 2003 to January 2021 as a business analyst/consultant for many different States. If any agency can release a full blown SNAFU it is Medicare/Medicaid. In 1974 Medicare (in their august wisdom) decided that $600/month was sufficient to support any elderly person, anywhere in these United States AND $600 was so generous it never had to be re-negotiated. My clients receiving what was then called MediCal (because they were so poor Medicare would not cover their needs. So we (Eligibility Workers) were required to take their gross income (usually Social Security) and deduct $600. Everything over that became their share of cost. Every January Social Security would have a modest increase. Every December the Department of Social Security would notify every Social Security Recipient of their increased benefit beginning January. Every County would then notify every MediCal/Social Security recipient that we were using every penny of that increase to increase their share of cost. And my phone would ring off the hook with elderly people irate or more often sobbing about how they couldn't feed themselves (you've probably hears stories of elderly people eating dog food - they're true) because the cost of their rent and medicine exceeded the amount of their Social Security checks. And I would sympathetically agree with them. explain again that this was a Federal rule over which neither I nor the County or State had any control. I would advise them to contact their Congressperson and explain the situation. I worked in a very conservative rural county, I was their "token liberal", so fat chance of any action from their dimwitted Republican Representative. As a County Worker I was forbidden to contact Congress on behalf of my clients. As to the $44 difference between what that company charged and what Medicare was billed is probably lining the pockets of whatever Consulting Agency was hired to do the Negotiations. Why do you think the Republicans and Manchin are so set against negotiating directly between the Government and the Pharmaceutical manufacturers? If you had the time, financing and ability to follow the money you'd see how much profit is made. PS Medicare/Medicaid so disillusioned me that I traded off all my MediCal only clients for cash and food assistance and became a subject matter expert which in turn gave e the knowledge and ability to stay employed until I was 6 weeks shy of 88 LOL. BTW, a Sacramento Congresswoman once took the challenge to live on $600 per week, she made it from Sunday until Tuesday