The November presidential election looms larger daily and the candidates from both parties are sharpening their rhetoric and addressing details to their plans for the next four years. Health care is a hot topic; the future of Medicare is up in the air. As the health insurance plan that will cover every American at some point in their lives, the interest in Medicare by Americans seems warranted.
The concern about how the largest single generation, that of the baby boomers, numbering between 72 million and 79 million, will affect Medicare's costs and coverage abilities is an economic reality. The oldest members of the baby boomer generation began turning 65 in 2011, and each day approximately 8,000 more people of the generation reach the milestone age at which eligibility for Medicare begins.
Neither candidate has set his plans for Medicare in stone, but the fuzzy, initial picture is coming more into focus as the election nears.
Affordable Care Act
The Associated Press asked the Obama campaign how the president's plan for seniors would affect the economic realities of costs and benefits. The current Affordable Care Act has built-in provisions that will phase in over the next few years that address cost-cutting.
One of the provisions of the Affordable Care Act intended to address cost-savings begins in 2013, as explained in the Sept. 2012 AARP Bulletin: Medicare payments will be reduced to hospitals that have the greatest number of hospital re-admissions within 30 days. This is a standard that has been the focus of quality control and Medicare for a number of years; in 2013, it will begin to cost hospitals some funding.
Obama and Baby Boomers' Medicare
According to the Associated Press, "The Medicare you get won't be quite as generous as what your parents' generation enjoys. A higher deductible here, a new co-payment there, and the tweaks add up." People who are better off financially in retirement (annually $85,000 for singles/$170,000 for couples) will probably pay higher Medicare premiums than their more financially strapped counterparts.
Newly joining baby boomers would pay a series of fees to join Medicare and incur an additional $25 deductible for outpatient services. Obama has waffled on the idea of gradually raising the eligibility age for Medicare from age 65 to age 67; he currently espouses that this change would not be needed.
The Obama campaign denounces the creation of a voucher system and currently has no plans for major changes in the Medicare system.
Baby Boomers and Medicare Insurance Premiums
As of 2014, when the Affordable Care Act will begin to levy a special tax on taxpayers who do not yet have health insurance, the baby boomers in the oldest three years of the generation will be age 65. Taxpayers for whom insurance would cost more than 8 percent of their 2014 annual income will be exempt from the special tax, which in 2014 represents the greater of 1 percent of income or $95. There are no criminal charges; the special tax covers the penalty.
Although neither candidate is willing -- or maybe even able -- to give more specifics on their planned future of the Medicare system, it's likely there will be more details and tweaks as the election deadline draws near.
Smack dab in the middle of the baby boomer generation, L.L. Woodard is a proud resident of "The Red Man" state. With what he hopes is an everyman's view of life's concerns both in his state and throughout the nation, Woodard presents facts and opinions based on common-sense solutions.