Understanding Medicare

National discussions about the future of Medicare continue on many fronts.  Unfortunately, some still do not understand the program and who it serves.  Wikipedia explains the purpose well: “As a social insurance program, Medicare spreads the financial risk associated with illness across society to protect everyone, and thus has a somewhat different social role from private insurers, which must manage their risk portfolio to guarantee their own solvency.^[1]“

Medicare Facts, Not Distortions

AARP’s Public Policy Institute prepared a fact sheet that identifies the population served by Medicare.  Seniors would do well to read this information carefully.  The facts are summarized here:

• More than 49 million citizens receive Medicare benefits.  In 2011, one-fourth of all beneficiaries were over 80.
• Medicare is offered to citizens over 65 and those on permanent disability.
• Nearly half of beneficiaries have three or more chronic health conditions.
• In 2010, 7.5 million beneficiaries were between the ages 65 and 76.  This speaks to the proposed change in enrollment age being discussed across the nation.
• Half of beneficiaries have incomes less than $22,660 (2010 figures).
• One-fourth have less than $10,000 in savings and investments.
• Most beneficiaries have Medicaid or supplemental insurance to cover medical costs not covered by Medicare. But eight percent of beneficiaries had no additional insurance in 2007.
• Beneficiaries spend a median of $3138 of their own money on health care and premiums (out-of-pocket).
• The older and poorer one is, the greater the percentage of income spent on health care.  In 2007, those 85 and older spent about 28% of their income on health care.
• Beneficiaries pay different premium amounts depending on income.

Readers are encouraged to read the entire fact sheet and digest the information.  The better informed we are, the better we are able to talk about Medicare issues without distorting facts.