The Encouraging Future of Medicare

Author: Seniorly Editor

| Published on: February,04 | Viewed: 2261 times

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The Encouraging Future of Medicare

by Deborah Dian

According to AARP, Americans have every reason to expect Medicare to remain solvent in the coming years.  Below is a summary of the AARP information from their November, 2014 “Bulletin,” along with additional changes made to Medicare in late 2015 and early 2016.

Medicare Increased Premiums for Millions of Beneficiaries

At the beginning of 2016, approximately one in seven Medicare beneficiaries saw their monthly premiums increase from $104.90 to $123 or more per month. If Social Security recipients get a cost-of-living increase next year, the remaining Medicare beneficiaries will also see their premiums go up. This increase in revenue will help keep Medicare solvent.

Medicare is Spending Less Than Projected 

The Congressional Budget Office projected a few years ago that Medicare would be spending $14,913 a year for each beneficiary of the program by 2019. However, Medicare costs are not rising as fast as expected and currently the CBO projects that costs will only be $12,478 per person by 2019.  That is nearly $2,500 per beneficiary less than originally projected.

How did Medicare spend less than projected? Hospital stays are shorter than in the past. The Affordable Care Act also created incentives for hospitals to reduce the number of readmissions.  In addition, Baby Boomers tended to take pretty good care of themselves, and the influx of younger, healthier adults into the Medicare program is keeping costs down.

New Medicare Money-Saving Programs

In 2016, Medicare increased the number of ACOs or Accountable Care Organizations.  They experimented with these for several years and discovered that they improve outcomes and save money for medical care.

Medicare also started paying doctors to discuss Advance Directives with their patients. A few insurance companies already paid for this service; now it will be widespread. The American Medical Association requested that Medicare take this step more than a year ago. Advance Directives take pressure off family members who do not want to make final decisions for their loved ones. When a person conveys their final wishes long before the time comes, the last few days of their life are more peaceful and free of unwanted treatments. Final medical expenses are frequently reduced when there is an Advance Directive, because the most expensive healthcare typically occurs during the last few months of a patient’s life. Frequently, the treatments that people receive during their final days are unpleasant and only minimally extend the patient’s life.

Medicare Fraud is Being Reduced

Medicare fraud costs the government billions of dollars a year.  Recently, the Justice Department began using Medicare billing data to track fraud. The government also encourages Medicare recipients to report suspected cases of fraud, for example when they see suspicious charges on their bills for treatments they did not receive.


Deborah Dian is a retired Baby Boomer and the author of  Baby-Boomer-Retirement.com, a retirement blog that contains information about Social Security, Medicare, financial planning, where to retire in the U.S. and abroad, as well as common medical and family issues.


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