Medicare Cuts: Will they affect you?

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Will Medicare Cuts Affect You?

The answer is most certainly yes, but the real question is… How will they affect you? News outlets have been discussing Medicare cuts very often, mostly because of the upcoming election and associated smear campaigns. However, Medicare cuts are very real, and understanding how these cuts will affect you will give you the knowledge to make good decisions regarding your Medicare insurance. Lets take a look at how they affect each type of insurance, including original Medicare.

Original Medicare:

(positive affect) Medicare Part A and Medicare Part B are depended upon by millions of people over the age of 65 or who are on Social Security Disability. Original Medicare pays the majority of most medical bills and has saved thousands of individuals from bankruptcy. Hence, the importance of a stable Medicare system cannot be overstated. One would assume any cuts to Medicare would directly affect the original Medicare benefits negatively. However, you could not be more incorrect in this assumption. The current Medicare cuts actually took money away from high cost initiatives and government subsidies associated with the Medicare Advantage program, which was designed to replace original Medicare as your primary insurance. Limiting funds for this high cost alternative has actually made original Medicare stronger.

Prescription Drug Plans:

(positive affect) Affordable prescriptions are a big concern for most people as they age. The introduction of Medicare Part D (prescription drug plan benefit) was well recevied, and has become a necessity for most people. Prescription drug plans have not been affected negatively, and most plan offerings from insurance companies have actually improved over the last few years. Furthermore, the Affordable Care Act is phasing out the donut hole, which is the last gap for seniors who take a significant amount of prescriptions.

Medicare Advantage Plans:

(negative affect) Many Medicare recipients, especially in urban areas, have learned to love these plans. For people in great health, the cheap monthly premium and included prescription drug plan make this an excellent option. The problem with Medicare Advantage Plans, however, is they cost the government 14% more per person than original Medicare. Furthermore, these types of plans really only benefit people who live in urban areas, which means those who live in rural areas are left holding the bag. In an effort to curb spending and make Medicare more solvent, cuts to Medicare Advantage plans were necessary.

The majority of people will be affected positively from the recent cuts to Medicare, and the system as a whole has a much better chance of lasting for generations to come. It will undoubtedly be interesting to see how these plans change over the next few years, and how they will affect the well being of our nations most respected demographic.