On Surviving the Medicare Crunch
A recent headline on an Economist article about Medicare in the United States admonished: “Better not be ill.” The truth of that will become evident to most Americans, 65 and older, on Jan. 1 when the so-called catastrophic coverage ends.
For a significant minority of seniors--those who supported the successful political struggle to repeal the year-old legislation--there will be no problem. These are the relatively well-off persons who already have so-called Medi-Gap and other insurance to cushion them against the huge expenses that Medicare does not cover. The congressional retreat on catastrophic relieved them of paying not only the premium, $5.30 a month in 1990, but also the income tax surcharge.
Still at issue, of course, is the problem of protection against the ruinous costs of long-term nursing home care. The catastrophic bill offered only marginal relief to this, the most serious health finance problem for seniors. With repeal, most seniors will be again fully exposed to the impoverishment of lifetime savings that almost inevitably follows long-term illness. The influential U.S. Bipartisan Commission on Health Care is working on a response to that as part of its March report to Congress.
Fortunately, the new year will bring one positive development for Medicare beneficiaries. Tighter controls over doctors’ fees for Medicare patients were adopted by Congress last month.The phasing in of the new system will commence Jan. 1, with full implementation due in five years.
One of the most significant protections of the catastrophic legislation, now repealed, was its unlimited benefit covering hospitalization. Not many are affected. The average Medicare hospital stay is 7.5 days. But for those with long illnesses, the cost will once again be staggering. Under catastrophic, the maximum hospitalization charge in 1990 would have been $592. Without catastrophic, that $592 must be paid for hospitalization at the beginning of each 90-day benefit period, and there are no hospital benefits for a 60-day period between illnesses.
Skilled nursing facility benefits revert also to the old rules. Once again, a minimum hospital stay of three days must precede entry to a nursing facility. Under catastrophic, that requirement was waived and the only charge was a co-payment of $22.50 for each of the first eight days of the 150 days of skilled nursing-facility care provided per year. As of Jan. 1, coverage will be limited to 100 days for each benefit period, and 60 days must pass after the 100-day benefit has been exhausted before readmission from a hospital to a nursing facility is permitted. Furthermore, after the first 20 days, the patient must pay $74 a day out of pocket.
Gone also will be the overall cap of $1,370 a year in out-of-pocket expenses for doctor bills provided by the catastrophic legislation. The premium for this medical coverage will be $28.60 a month in 1990. The patients pays the first $75 of doctor bills each year and 20% of the balance of approved doctor charges. Also lost were the prescription drug benefits that were to have been phased in, as well as provisions to cover the cost of premiums for low-income persons to assure universal coverage.
The full impact of what has been lost will be learned first in the new year by those struck by illness and injury requiring long hospitalizations. Their experience may help other Medicare beneficiaries better understand how vulnerable they are because of the diminished protections. That, in turn, may encourage a greater effort in Congress to address the health-care gaps of the nation as the bipartisan commission prepares its report.
