Jerome Bigge
Aug 28, 2017 · 2 min read

Medicare as it exists today has some serious “flaws” that can bankrupt people. If you visit the CMS website, you will see that Medicare Part A (pays a portion of hospital costs) has both an “event” limit and a lifetime limit. Medicare Part B (pays for doctor visits and services) pays 80% of the cost of such visits and services. Medicare Part D (drugs) offers coverage up to a limit (currently $3700) after which you end up paying quite a bit more until you reach the final stage where the coverage of costs is much higher. Those who use “expensive” medications can pass through the initial coverage stage where you pay a co-pay for the needed drug until you wind up in the “donut hole” where depending upon your plan, you likely will be paying about half the (inflated US cost) of the drug in question. True, you can buy private insurance (Medicare Advantage) or (Medicare Supplement) for added coverage, but the cost per month may be a problem for many seniors.

A better solution is to build the “single payer” system basing it on Medicaid. Medicaid is effectively “limit free” and there is no “donut hole” for drugs. The financing for Medicaid comes through a joint federal/state system with taxes as the source of the money to pay for the coverage. For non-seniors Medicaid costs about $5,000 per capita, but this figure varies by the state where you live as does the maximum income level you can have and still qualify for Medicaid.

Medicaid is not popular with health care providers as it pays less than what they can receive from private insurance or Medicare for that matter. It is not a case of “affordability”, but more what will be paid for an office visit or service. As there only a certain number of hours in a day, the incentive for providers is to take the best paying first, and then work down from there. There are also “fixed costs” that providers must consider, so the level of profit gained by providers is also a consideration today. However these “fixed costs” do vary depending upon the educational level of the provider. Nurse practitioners for example likely need to charge less than do MD’s. Additionally some services are cheaper to provide than others.

It can be seen here that the basic building blocks of a “single payer” system should be based upon the lowest cost “base” to start with…

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