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The benefits of Medicare are riddled with holes – and patients keep failing

Medicare is one of America's flagship government programs that is immensely popular with the public, a critical safety net for people over 65 – and it's full of holes.

The program's benefits are not as comprehensive as most of the other types of health insurance that Americans have. Unlike commercial health insurance or Medicaid, which covers people in or near poverty, there may be no limit to what a person with Medicare can pay for out-of-pocket medical care.

Medicare also does not cover dental or visual services that are critical to the health of the 65+ year olds it serves. The benefits for long-term care are small, which puts a huge financial burden on patients and their families.

Two things can be true at the same time: Medicare has been a tremendous success in eradicating medical spending poverty among the elderly compared to the pre-1965 status quo, and, as it is currently constructed, is utterly inadequate to the realities of modern health care.

The Democrats in Congress seem to recognize this problem. They plan to expand Medicare somewhat – by adding new benefits and possibly more beneficiaries – in the major budget reconciliation bill they plan to adopt in the coming months.

Right now, they seem to be focused on adding new dental, visual, and hearing benefits. You work with finite resources; Money spent on new services is money that cannot be spent adding more people to the list or reducing patients' own costs for other medical services.

Medicare is not, as it currently exists, comprehensive coverage for all of its beneficiaries. But improvements to the program risk battling a private insurance industry that enjoys large and growing business and that fills the loopholes in the traditional Medicare program. (It also remains to be seen whether the Democrats will be able to pass provisions on Medicare drug prices under the Reconciliation Act, which drug companies are vehemently opposed to.)

Polls show that Medicare enhancements are popular with voters in many ways. The 60 million people who depend on Medicare to provide new dental, hearing and / or visual services could be a political winner for the Democrats. That's one of the reasons the Biden White House is reportedly trying to get seniors benefits as soon as possible, even though the bill released by the House Democrats wouldn't introduce new dental services until 2028.

However, that means that Medicare's traditional benefits may not be affected. Patients will still be forced to navigate a complex web of Medigap or Medicare Advantage plans to complement the traditional program or risk thousands of dollars in out-of-pocket expenses. Currently, an estimated 6 million Medicare beneficiaries have no additional or alternative insurance coverage, which means they theoretically have no limit on their out-of-pocket expenses if they need a lot of medical benefits.

Democrats in Congress could create new benefits, improve existing benefits, or get more people eligible for Medicare – but they don't seem willing to do all three. Millions of Americans could pay a price for the holes left in the program.

Where Medicare falls short

Utah's Lee White estimates he paid $ 30,000 in health bills last year despite both he and his wife being enrolled in Medicare.

Of that, about $ 10,000 was spent on medical care, which is technically covered by Medicare, according to White. There are visits to general practitioners and specialists; his wife Marilyn has had multiple sclerosis since the 1980s, so they are in the doctor's office a lot. She recently broke her leg in a fall that took her to the hospital. There are also imaging and prescription drugs that whites have to pay their share for.

Medicare Part A and Part B, which provide inpatient and outpatient services, require patients to be co-insured, a percentage of the total cost of a service. There is currently no limit to how much a beneficiary can pay unless they have supplementary insurance.

Part-D drug plans usually have a cap, but there is still a deductible that patients must meet. There was also a coverage gap known as the "donut hole" that temporarily leaves patients with heavy bills for prescription drugs.

Some patients also pay premiums. Low-income people who are eligible for Medicaid will have all of their costs covered through this program.

Then there are the home health workers who look after Marilyn, who Medicare doesn't cover at all. White says that's $ 25,000 or more every year.

Most Americans don't have long-term care insurance, and the government usually doesn't offer it unless your income and assets are low enough to qualify for Medicaid. Medicare long-term care benefits are extremely limited in their current structure and do not include the kind of non-medical assistance that patients like Marilyn rely on to stay at home.

White, who worked in public order at the AARP for years, says he and his wife are fortunate enough to be able to afford their home care on their own, thanks in part to the health benefits White receives from his old retirement job.

It is important to White that Marilyn can stay at home. It is the place where they meet with their family, where they encourage their grandchildren to let off steam. He also knows from his head how long the life expectancy is when someone enters a nursing home: two years.

White pays to have helpers five days a week, four hours a day to help with bathing, food preparation, and household chores. These are benefits that Medicare does not cover, but are essential for the way of life of the whites: Lee himself suffers from a neurological disease that makes it difficult for him to help his wife move around the house. He's worried about dropping her and causing another broken leg or worse, hip.

But the cost of this domestic help is still a burden.

"It's very, very sticky," says White. Medicare "doesn't cover the kind of things we need".

Medicare has been patched up over the decades, and its benefits reflect that broken history. It started out as hospital insurance and mirrored health insurance as it largely existed at the time the program was launched in 1965. It wasn't until 2003 that Medicare covered prescription drugs. Congress has restlessly tried to improve its patient co-payment, sometimes (as in the 1980s) it passed a new benefit and then withdrew it.

When the Affordable Care Act was passed in 2010, Congress set a cap on the outlay on private health insurance policies sold under the law. But Medicare, which was created in an earlier era of health insurance, has no such cap. It stands out among all the different health insurances in the US as an example of outdated policies.

"Medicare is one of the few health plans or programs today that has no self-spending cap," said Tricia Neuman, senior vice president of the Kaiser Family Foundation, a nonprofit health policy.

The traditional program never covered dental or visual benefits either. And the stats on the dental care of US seniors are particularly appalling.

About half of Medicare's 60 million beneficiaries have no dental care at all. The other half take out some kind of private insurance.

Those who are not insured either pay for dental care in full or they don't get any at all. The data shows that many of them fall into the latter group: more than half of Medicare beneficiaries have not seen a dentist in the past 12 months, according to the Kaiser Family Foundation. These people were disproportionately black, Hispanic, and low-income.

"Dental care is really an equity issue," said Neuman, "because there are such differences in the use of dental services by race and income."

The relationships between dental health and other physical health have been much better understood in the years since Medicare was founded. But dental care does not stay within the traditional program for the time being, as do visual and hearing benefits.

What Are Democrats Ready To Do?

Democrats say they want to expand Medicare – but they also need to consider the influential health lobby and fiscal concerns of the party's more moderate members. Intense opposition from industry would pose a political challenge to the upcoming law of reconciliation, which must include every Democrat in the Senate and has little margin for error in the House of Representatives.

Private health insurers have invested in the Medicare program in its current form. Medicare Advantage, formally (under a different name) in the Clinton administration, has slowly supplanted more of the traditional program.

Medicare Advantage plans are sold by private companies as an alternative to traditional Medicare. They are usually similar to commercial insurance with a deductible and a deductible. Most of these plans also offer some of the dental, visual, or hearing benefits that the traditional program doesn't.

Seniors have gravitated towards the private plans in part because they are more seamless than traditional Medicare. The number of enrollments has increased from 12 million in 2011 to around 26 million in 2021. Medicare Advantage now accounts for 42 percent of enrollments, up from 25 percent a decade ago.

Otherwise, Medicare beneficiaries who stay with the traditional program sometimes take out supplemental insurance to cover part of their co-payment or benefits that are not included. Around every fourth traditional Medicare member buys a so-called Medigap plan, which makes it another lucrative secondary market for insurers.

Improving traditional Medicare benefits – by introducing new visual and dental services or reducing patient co-payments – threatens the interests of health insurers.

It's going to cost money too, and one way to pay for these new benefits is to cut payments to providers or impose new taxes on private insurance plans. But that will surely also meet with resistance.

The health insurance industry "appears to be concerned about the smaller difference in benefits between Medicare Advantage and (traditional Medicare) and being forced to pay more than anything for the additional benefits," said a lobbyist who works with health insurers.

Democratic majorities are walking a tightrope no matter what they do with Medicare. Hospitals and doctors are also likely to object if Congress tries to expand the program to those under 65, since Medicare pays providers less money than the commercial plans many of those people would otherwise be enrolled on.

Democrats in Congress have tabled a variety of Medicare expansion proposals, everything from new visions and dental benefits to lowering the eligibility age to 60 until everyone is eligible. According to media reports, new dental, visual and hearing services appear to be the top contenders for the upcoming law of reconciliation, with left-wing senators also pushing for more people to be eligible. Improving the program's traditional benefits or adding long-term care benefits doesn't seem to be on the table, although President Biden is looking to spend more money on Medicaid's services at home.

Every political decision involves a compromise. In theory, Democrats have at least three options: add new benefits, expand eligibility, and improve traditional coverage. The debate over the next few months will determine what the next addition to Medicare looks like – and what gaps remain in the program.

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