Medicare pays doctors less than private insuranceGiving individuals and families access to affordable healthcare is only step one of a national problem. Step two is finding enough doctors who are willing to treat patients, especially those who have signed up for Medicare and Medicaid. The Obama Administration may tout its nebulous healthcare numbers, but the discussion should be less about the numbers and more about whether you will actually be able to find a doctor.
New information from CNN Money reveals those with Medicare may have difficulty finding treatment options because the government program pays up to 20% less than what the doctor could get if the patient had private insurance.
In fact, the payments can be substantial. According to CNNMoney and information provided by the Centers for Medicare and Medicaid Services and Truven Health Analytics, common procedures can payout much less under Medicare. For instance, private insurers currently allow, on average, $1,226 for low-back disc surgery, while Medicare will only permit $654.
Interestingly, the differences can also increase based on geography. For instance, if you are in New York and you have gall bladder removal surgery a private insurance company may pay $1,352 for a gall bladder removal, compared to $580 for Medicare.
So why does Medicare pay less than private insurance? According to Stuart Guterman, vice president at The Commonwealth Fund, an independent health policy research group, "Medicare doesn't negotiate rates. It sets them.
But doctors also acknowledge that although one procedure may pay less under Medicare, because Medicare patients are generally older, they may need more care. This can result in a greater number of medical procedures and higher payouts over time. Private insurance also has difficulty negotiating for better rates because doctors may be able to simply opt out of taking certain types of medical insurance if they dont think they are getting paid enough.
We have seen this recently when the Obamacare exchanges launched in October. As the insurance rates for some exchanges were lowered to keep premiums low for patients, some doctors simply decided not to participate, resulting in limited access to doctors and patients for some consumers.
Why has Medicare costs skyrocketed?
Not only has the population aged, but cheaper access to medical care results in increased usage and a subsequent increase in the cost of Medicare. And while private companies have done a better job regulating unnecessary procedures and requiring pre-authorization and approval prior to implementing a treatment plan, the government has not. In fact, Medicare and the Federal Government have been under greater pressure to pay for the care the doctors prescribe.
Future of Medicare
So what should be done about Medicare costs and spending? This is a very good question. With projected costs expected to reach $1.041 trillion dollars by 2022 most lawmakers believe its imperative some changes are made to keep Medicare viable. Common suggestions include:
- Raising the age of Medicare eligibility from 65 to 67
- Increasing or modifying beneficiary cost sharing in a variety of way
- Increasing beneficiary premiums
- Increase revenue through: raising the Medicare payroll tax or other existing taxes