 | Dennis Manson
is director of Medicare sales for Preferred Health Systems. He has appeared on numerous local television shows and radio broadcasts to answer listeners’ questions about insurance and Medicare. Manson joined Preferred Health Systems in 1994 as manager of Medicare administration. He has been involved in the insurance industry for 16 years and the Medicare side of insurance for 14.
Incorporated in 1993, PHS was formed with the encouragement of area physicians, as well as St. Francis Regional Medical Center and St. Joseph Medical Center, and is now part of Via Christi Health System. PHS is the parent company of several individual companies. These companies develop and manage health benefit and insurance programs with a common mission to develop partnerships with health care providers to improve the health and well-being of its members and the communities it serves. |
Insurance
2001-09-01 11:37:00
Will we still have Medicare?
Question: My husband and I are in our mid 40's. We have our own business. We buy our own health insurance. Like a lot of people, we're concerned about the future of Medicare. Will it be available to us when we need it, and if so, how much are the premiums projected to increase?
Answer: As with anything, it's all about how much is coming in and how much is going out. Medicare spending continues to increase at large levels. In 2000 it represented 2.5 percent of the gross domestic product (GDP), and it is projected to be 4 percent in 25 years. According to the 2000 Trustees Reports, the Medicare Part A Trust Fund will be insolvent in 2025. The number of beneficiaries will increase by 77 percent during this same period.In fact, the number of beneficiaries will rise faster than the number of workers contributing to the system beginning in 2010. This bulging of Medicare expenditures hits our senior citizens very hard. If you consider how much Medicare beneficiaries spend out of pocket for health care, the trend is disturbing. Currently Medicare beneficiaries pay for about 22.7 percent of Medicare expenditures from their own pockets for such things as Part B premium, deductibles and coinsurance. By 2025 this is projected to go up almost 3 percentage points to 25.3 percent. Fortunately, much of these costs that come from the Medicare deductible and coinsurance are covered by Medicare supplement policies that can be purchased from insurers. The Medicare economic forecasts seem to bear little good news. Brace yourselves for the projections on the Medicare Part B premiums for the future.Twenty-five years from now, the premiums are projected to increase by more than 80 percent from what they are currently. The premiums will increase from $631 in 2000 to $1,151 in 2025. During that same time, the Medicare expenditures that beneficiaries pay will go up from $1,636 to an estimated $2,660. The challenges facing Medicare come from the so-called "aging of America," that is, a growing senior citizen population, sharply increasing medical costs and the Medicare system being underfunded. Yet these costs do not include the costs for prescription drugs because most are not currently covered under Medicare. Currently, many of our senior citizens are financially strained by paying the full-cost for drugs, but adding the coverage to Medicare will only tax an already over-strained system.
