Among the many dangerous provisions of the Republican budget plan is the scheme to convert Medicare to a voucher program that would funnel billions of taxpayer dollars into the coffers of insurance companies. This inane proposal would inevitably either dramatically increase expenses or reduce coverage for recipients, and probably do both.
Currently, Medicare pays out 97 percent of its receipts to cover medical services for recipients. In contrast, insurance companies pay out only 70 to 75 percent of premiums received to cover medical care of enrollees. The other 25 to 30 percent is diverted to executive salaries, investor dividends and administrative costs, which include efforts to avoid paying for covered services. Thus, to provide the same services currently covered by Medicare, additional federal dollars will be necessary. Because the whole purpose of this “reform” is to reduce federal expenses, drastic reductions in services will most likely result.
The Patient Protection and Affordability Act requires insurance companies that participate in exchanges to devote 80 to 85 percent of their premiums to cover patient medical services, and the companies are whining about that target. Obviously, they will not come close to Medicare’s current level of efficiency.
Changes in Medicare are needed, but depriving recipients of services while enriching insurance companies is certainly the wrong approach.
Robert Blake, MD, lives in Columbia.