Many people argue that the US Medicare system has the appropriate equity for the citizens. Some argue that it would be better if the US government regulates its subsidies between rich and poor citizens; because when a person pays the full cost of the benefits he receives, there will be no redistribution occurs. However, when a person pays less than the full costs of his benefits, he receives a subsidy and other population groups must bear the financial burden of that subsidy. Base on this point, the US Medicare system seems to be less fair for the US citizens. Therefore, in this paper I will argue that there are more for the US government to do on the US Medicare system, particularly make the premiums in Medicare system income related.
Medicare …show more content…
That is because the Medicare system is set up as a pay-as-you-go system, its beneficiaries contributed much less than the benefits they have received on average. More deeply, Medicare benefits have been the same for all the aged regardless of income. According to an Overview of Medicare, “almost all the aged (97%) pay the same premium and therefore receive the same subsidy. Medicare has relatively high deductibles and no limit on out-of-pocket expenditures, and non-acute services, such as long-term care are not covered” (An Overview of Medicare, 2016). Furthermore, those aged requiring home care of nursing home services unrelated to an illness episode have to typically rely on their own funds to cover such expenses. So, out-of-pocket payments for excluded benefits as a percentage of income are high for the low-income aged. According to Justin’s report, “out-of-pocket payments for excluded benefits as a percentage of income are 20 percent higher than the low income aged. Consequently, many low incomes aged find the out-of-pocket expenses a financial hardship, and 16percent must rely on Medicaid”. (Justin, 2015). If the society makes the value judgment that it wants to help those with low incomes by providing them with a welfare benefit, the most equitable way to do so would be to provide the majority of benefits to those with low incomes and finance those benefits by taxing those with higher incomes. So, there is possible solution could be used in Medicare system, that is to make the Part B and Part D premiums income related. If the Part B in Medicare system increase, the hardship on the low income aged would be minimized by a greater use of income related premiums. Equity would be improved and the deficit reduced if subsidies to higher income aged were eventually completely phased out. According to United States Renal Data System, “as a result of the Medicare Modernization Act of 2003, the Medicare Part B premium became income related;
Medicare …show more content…
That is because the Medicare system is set up as a pay-as-you-go system, its beneficiaries contributed much less than the benefits they have received on average. More deeply, Medicare benefits have been the same for all the aged regardless of income. According to an Overview of Medicare, “almost all the aged (97%) pay the same premium and therefore receive the same subsidy. Medicare has relatively high deductibles and no limit on out-of-pocket expenditures, and non-acute services, such as long-term care are not covered” (An Overview of Medicare, 2016). Furthermore, those aged requiring home care of nursing home services unrelated to an illness episode have to typically rely on their own funds to cover such expenses. So, out-of-pocket payments for excluded benefits as a percentage of income are high for the low-income aged. According to Justin’s report, “out-of-pocket payments for excluded benefits as a percentage of income are 20 percent higher than the low income aged. Consequently, many low incomes aged find the out-of-pocket expenses a financial hardship, and 16percent must rely on Medicaid”. (Justin, 2015). If the society makes the value judgment that it wants to help those with low incomes by providing them with a welfare benefit, the most equitable way to do so would be to provide the majority of benefits to those with low incomes and finance those benefits by taxing those with higher incomes. So, there is possible solution could be used in Medicare system, that is to make the Part B and Part D premiums income related. If the Part B in Medicare system increase, the hardship on the low income aged would be minimized by a greater use of income related premiums. Equity would be improved and the deficit reduced if subsidies to higher income aged were eventually completely phased out. According to United States Renal Data System, “as a result of the Medicare Modernization Act of 2003, the Medicare Part B premium became income related;