I’m a little embarrassed to admit that I’ve never watched an inauguration day in its entirety, until last month. I’ve never taken the time to just sit for a whole day and watch it all the way through. I really try to keep up on current affairs and I feel that it’s important we all be aware of just what’s going on politically, especially when it has such a potential impact on our lives and welfare. For good or for bad, I believe this presidency will go into the books as one of the most unique and controversial in our country’s history. So, I watched TV the whole day on January 20, 2017.
It is estimated that over 55 million Americans are now affected by Medicare. We added Medicare supplements to the list of insurance products we were providing in 1976, 10 years after Medicare was first offered by the federal government. We’ve seen a lot of changes to Medicare in the last 40 years. Some changes have improved the product, and in my opinion, some have not. Sometimes it took a while before we could look back and determine whether the changes improved the product or not. Sometimes it took a while to see whether the changes actually benefited those on Medicare or whether the changes were made to cut the ever-increasing costs of Medicare to the federal government.
Through the years, I’ve watched bills regarding Medicare being presented in Congress and followed them as they were changed, modified, and ultimately passed into law. With some I was pleased and others I quite frankly just held my breath and crossed my fingers. But we survived. We had a little time to adjust, think about it, and seek new and better ways to advise our clients. My day invested in the inauguration gave me very little insight as to what we might expect regarding Medicare in the next four years.
However, I reserve the right to speculate and make some educated guesses as to what might or might not happen during this presidency:
- I don’t recall our new president actually addressing the future of Medicare at all, before or after the election. We know how he feels about the Affordable Care Act or “Obamacare”. It’s believed that he will dismantle it completely or at least make major changes within it. This will be such a major undertaking along with his other major priorities, Medicare may be shelved for a later time.
- We know that Medicare will be encountering some major funding issues by 2028. Combine this with our ever-increasing national debt, I suspect that Congress will be submitting bills to address the increasing costs, but not overhaul Medicare in its entirety.
- The biggest threat to Medicare’s solvency today is the onset of “Baby-Boomers” already entering the program. Never has Medicare faced such a large number of new enrollees over such a short period of time. This is so significant that it may cause the 2028 funding problems to be changed to a nearer date.
- One suggestion has been to change the Medicare enrollment age in a similar manner as they’ve changed Social Security. They may change the enrollment age gradually from age 65 to age 67 or possibly to age 70 somewhere in the future. It would not affect those of us on Medicare now or even those who would be turning 65 in the next 5 or possibly 10 years. This would give younger citizens time to adjust to a graduated older age schedule for enrollment in the future.
- One of the reasons that I believe that Medicare will not receive a major overhaul is that most us on Medicare currently supplement our Medicare with insurance policies that have contractual lifetime guarantees that are built into the plans. Major changes could conflict with those guarantees. I’m not sure if those guarantees could be circumvented. This, at the very least, should allow those of us on one of these plans to have grandfathered benefits for the rest of our lives, should we choose to do so. At some point those plans may no longer be offered to new enrollees.
- For those enrolled in Medicare Part C, also known as the Advantage plans, the possibility of major changes could be more feasible. Advantage plans are only guaranteed for one year. Current policies are susceptible to change every year. Medicare could reduce the amount it contributes toward the costs of the Advantage plans, which could go a long way to reduce the overall costs of Medicare. Insurance companies are in the business of making a profit. They may either reduce benefits, raise rates, do both, or discontinue the plan completely. They also may choose to no longer offer Advantage plans in specific counties, states, or no longer remain in the Advantage plan business. In my opinion, this is what has happened to “Obamacare”. There are now very few companies that even offer it and the costs and deductibles have sky-rocketed.
- There has been speculation that the replacement for “Obamacare” would include coverage for everyone, citizens of all ages. The idea would be to have a single carrier, in lieu of multiple insurance companies. I suppose the single carrier could be the federal government and that one plan would fit all ages. This would be a form of “Socialized Medicine” provided by other countries and has been a suggested solution for our country for many years. As tax paying citizens, we have paid into Medicare for many years prior to retirement. Seniors have different medical needs and we have pre-paid a portion of our Medicare coverage. I don’t see a form of socialized medicine for seniors occurring during the next four years.
These are some of my personal thoughts and opinions regarding the future of Medicare. Like you, I’ll have to sit back and wait to see what happens. Don’t allow all the speculation to cause you to delay your coverages and enrollment dates. It’s very important that you continue getting and keeping your Medicare and supplemental coverages while we wait to see what’s going to happen. Call us if we can help.
Orion Steen is a licensed agent and specializes in Medicare supplemental plans. He has been advising his clients on life and health insurance matters in Arizona for over 45 years. He can be reached for related questions by E-mail at firstname.lastname@example.org, call toll-free 888-846-6891 or cell 623-846-6891.