Phil Castell
Castell Insurance
426 E. Washington St., Sequim, WA 98382
Phone: 360-683-9284 • Fax: 360-683-9026
Phil@CastellInsurance.com
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Medicare Matters
Phil Castell

I thought a title like the one above might get your attention. Was I right or are you a member of my loyal readers who read all my columns?

 

It seems like ever since Gov. Romney announced Paul Ryan as his running mate for the upcoming presidential election, Medicare has become the primary focal point for both sides.

 

It is a subject that comes up everyday in dealing with folk and their health insurance needs, both those already enjoying the benefits of Medicare and those who are looking down the road a ways.

 

For those already on Medicare, the most common thread is “Don’t mess with Medicare, it is working just fine," for those between 50-65 it is, “I hope it is still around for me” and those under age 50 it is, “I can’t count on either Medicare or Social Security to be available for me."

 

As with most tough decisions, a compromise should be made.

 

My definition of a compromise is where neither side is either 100 percent satisfied nor 100 percent dissatisfied.

 

For those already enjoying the comprehensive benefits of Medicare, they should realize it is unsustainable in its current format with the current funding mechanism. As my mother-in-law says, she is enjoying the absolute best care ever available and her costs are minimal other than her Medicare and supplemental insurance premiums.

 

For those not yet on Medicare, they can only hope that the benefits available will be close to as generous as they are today.

 

Now, let’s take a brief look at the details of the plan that was proposed by Rep. Paul Ryan.

 

Firstly, he is not proposing any draconian changes for those who are already on Medicare, nor for those who are age 55 or older when the legislation passes. I hope you realize that an awful lot of things have to happen before it is enacted. The first and most important thing is that Gov. Romney would have to be elected as president, otherwise this proposal is a non-starter politically.

 

For those who are under age 55, Medicare would change from a pure entitlement program to an entitlement program with fixed dollar limits or a voucher program.

 

The following was an outline shown on ABC News and uses a voucher amount of $15,000 per year.

 

Simply put, a person would have a choice of purchasing original Medicare or a private insurance program at a different rate. If the government said the value of Medicare was $15,000 and you were healthy and chose a plan with an annual premium of $12,000, then you would receive a check back for the difference or $3,000 for that year. However, if you thought you needed more coverage, you might choose a plan with a $18,000 premium and be responsible for the additional costs over the voucher of $15,000 or in this care and extra $3,000.

 

What was that I heard you saying … Keep private insurance companies out of Medicare? Well, we are a number of years too late for that to happen.

 

100 percent of all Medicare Part D prescription drug plans are sold and administered by private insurance companies. Furthermore, over 25 percent of all Medicare eligible enrollees already receive their Medicare benefits through a Medicare Advantage plan administered by a private insurance company.

 

Come to think of it, the only difference that I see is that under the voucher system you would receive cash back for choosing a lower-cost plan where under the current system if you choose a program with lesser benefits, you do not receive a rebate.

 

So we already have a version of a voucher system, but the one that is proposed is even more generous than the one currently in place.

 

Wow, why aren’t people jumping all over this? If I am missing something, I would urge you to educate me via my contact information at the end of the article.

 

I would argue that the government should not issue refunds to those who choose less expensive plans as that would only encourage people to take lower-cost plans. If or when something bad happened, they may not be able to afford the extra costs associated with their poor decision and fall back onto the government safety net of Medicaid.

 

One of the other provisions I have heard, only once, was to increase the Medicare eligibility age to 67 to keep it the same as Social Security for full benefits. That makes sense, but now I am only 13 years and 3 months away from age 65, waiting that extra two years is a sacrifice I would be willing to make to help the system's long-term viability.

 

Whatever happens, I am glad that this is a subject of debate as the country faces some tough decisions in the future and the sooner we start to address them, the easier the solutions will be to take.

 

Phil Castell is an independent insurance agent in Sequim. He can be reached at 683-9284 or PhilCastell@msn.com.