May 2016 Brief: Volume 23, Number 15
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Is Medicare Trying To Kill Us Or Bankrupt Us?
by Sheldon Rabinowitz
People covered by Medicare have a pretty good deal, as long as they live long enough past retirement to overcome the non-tax-deductible amounts they paid in Social Security taxes while working. If they buy supplemental health insurance coverage, their primary medical cost is the insurance, since between Medicare and the supplement, almost all of their expenses are covered.
But if you have had or maybe currently have cancer — beware. Medicare, or the Social Security Administration, or the U.S. Government may not want you to live any longer than necessary. And in some circumstances, if you are not covered by Medicare or don’t have health insurance — besides trying to kill you, the U.S. Government may want to bankrupt you first.
The best way to detect cancer in any part of the body is having a positron emission tomography (PET) scan, a diagnostic test developed less than 20 years ago. It is a full body scan that will show cancer or a cancerous growth anywhere in the body. Cancer can grow or spread in a person’s body, remaining undetected without this scan, while it is most treatable. Medicare has recently capped the reimbursement for PET scans and will now only approve reimbursement for three tests after January 1, 2013, during a person’s lifetime.
Medicare negotiates large discounts on about all medical services from what are deemed the standard charge otherwise charged by any hospital or doctor. The reduction to the “approved” amount may vary and can be discounted up to 75 percent or more. What is unfair is that if an uninsured individual sees a doctor or has such a test, the provider must charge that unfortunate individual the full amount, or be in violation of the law and of their agreement with Medicare.
In essence, the U.S. Government is the cause of horrendous price discrimination, completely unjustified by any cost differentials in providing the service. It would seem to be in violation of the Robinson-Patman Anti-Price Discrimination Act. Here we have a case of prices apparently jacked up to unreasonable amounts in order to provide large discounts demanded by a selected customer — a U.S. Government agency, with all other consumers and consequences be damned.
Charges vary around the country, and Des Moines is undoubtedly a city where the amounts “approved” are lower compared to major metropolitan areas. The typical cost of a PET scan in Des Moines is $7,973. The Medicare “approved” amount is $1,755, a 78 percent reduction. (80 percent of this amount is paid by Medicare and the balance is paid by insurance or the patient.) It would seem that the real price to all people at all times should be $1,755.
We all know that Medicare and Social Security have a large unfunded liability for future costs. To reduce such costs, it may have been reasonable to limit the allowable number of these scans. But why stop there? Maybe limit dialysis treatments as well? Maybe they will put a limit on how much Medicare should spend for any one patient in his or her lifetime? Further, if such limitations are justifiable, maybe even more drastic measures will be imposed, such as an age limitation on medical care? Or carrying it to the extreme, perhaps the harshest and cruelest cost reduction of all — how long may Grandma receive her monthly Social Security payments?
Regardless of limitations imposed, why does our government participate in a scheme that creates unconscionable price discrimination, making the stated price so artificially and egregiously high that people can’t afford to pay for such tests on their own? Is the Social Security Administration trying to cut its unfunded liability by killing off some cancer patients?
These ridiculously high charges, offset by big discounts to Medicare and other insurers of 60 to 80 percent, permeate the entire health care system including mere office visits, medical procedures, and hospital stays. It is as if there is a war on the uninsured (or self-insured) and an intentional effort to bankrupt them.
To have everyone, whether under the limit of PET scans or over the limit, insured or uninsured, be able to make their own decision to buy the very same medical service at the same price, is too simple and too fair —the bureaucrats can’t comprehend it!
Is Medicare trying to kill us or bankrupt us? Maybe both.
Sheldon Rabinowitz is a retired accountant living in Des Moines, IA.
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