Most Seniors Have No Reason to Care if Medicare Costs Go Up
With no inflation, Social Security's cost-of-living adjustment next year is expected to be zero. But Part B premiums will go up (because medical inflation is positive) and those premiums are deducted from Social Security checks. So under ordinary circumstances, the elderly would be getting smaller Social Security checks next year. However, about three-fourths of Medicare beneficiaries are protected by a "hold harmless" provision, insuring that their Social Security checks never get smaller.
What, Me Worry?
Great post.
This is bad. It insulates patients from the overall costs of their actions. It encourages them to waste money at everyone else’s expense.
It gets even worse. Congressional Leadership supposedly cut a deal with PhRMA to close the coverage gap — further insulating seniors from the cost of name-brand drugs they would otherwise have had to pay for during the so-called “donut hole.” Seniors typically would pay a $295 deductible, then only 25% of the next $2,400 in costs. All of the subsequent $2,000 (after total drug expenditures reaches $2,700) would ordinarily be the seniors’ responsibility. Above that point Medicare begins to pay 95%. The coverage gap is a powerful incentive to shop for generic drugs. Under ObamaCare, seniors would have little reason to care. As a result, taxpayers would bear 95% the cost for high-priced, name-brand drugs because seniors would have no reason to switch to lower-cost drugs.
Chuck Blahous has an editorial in the Washington Post with more explanation. http://bit.ly/GnPPU
How will the latest healthcare bill effect this? (assuming it passes)