A couple of years ago, before my wife and I had turned 65 and become eligible for Medicare, we looked upon mail from our health insurance provider with dread wondering if our premiums had gone up again. We were on a group policy under my small company (2-3 employees max), and our rates were practically the same as individual coverage. Health insurance was a major budget item for us. A notice of increased premiums put us back to step one in our budgeting process because heath insurance cost us more than our monthly mortgage payment.
As a result, I felt a huge twinge of empathy (and anger) when I read a recent LA Times article which reported that Anthem Blue Cross was raising its health insurance rates as much as 39% for individual policy holders. Based on personal experience, I felt sure that those individuals at the high end of the increases were likely to be 60 years old and above. Once we reached 60, despite good health and no major (i.e., expensive) medical problems, we found it very difficult to even purchase insurance, much less pay for it.
Medicare has been the saving grace for us. Not only did our insurance premiums drop significantly, but our co-pays also fell by a considerable margin. A typical doctor visit under our standard insurance required a $40 co-pay. It’s free under Medicare. Most of our prescriptions are either free or under $10 under Medicare Part D, and there are no forms whatsoever. Our rates do increase a bit from year to year, but at a pace we can easily handle. Overall medical costs are down more than 50% and have finally stabilized for us.
To put it succinctly, Medicare has been wonderful. It gives us the best of single-payer simplicity despite the fact that we work directly with a private insurance carrier. It provides substantively lower prices without requiring us to change doctors.
What I don’t understand is why this public-private partnership can’t work for everyone, and why some people believe that extending this type of program beyond seniors signals the downfall of free-market capitalism.
Here’s how I see it: Medical costs were making life difficult for my family. Medicare solved the problem. Medical costs are making life difficult for the nation as a whole. Medicare for all seems like a logical, ready-made solution. The fact that Medicare is having financial difficulties is resolvable. In fact, I have two specific suggestions:
First, eliminate the Medicare Advantage plans, which are heavily subsidized by the government, so insurance companies can offer them at bargain prices. Insurance companies are making a bundle off of Medicare Advantage and market it more aggressively than the simpler and more sensible Medigap plans.
Second, get tough on drug costs. Negotiate on a national level with the pharmaceutical companies and force them to reduce prices. Wal-Mart does that with its suppliers every day, and no one is accusing Wal-Mart of undermining capitalism.
If we want to get serious about solving our health care cost issues, we should all take a page out of our seniors’ book of advice and strongly consider Medicare as a viable solution. A 39% increase in health insurance rates by Anthem Blue Cross cannot be ignored.