OpenPlacement Blog

Medicare Funding at Risk of Being Drastically Reduced: What Does This Mean for the Rest of Us?

HEARTMedicare and Medicaid are two of the largest expenses the federal government undertakes. Due to this, these are often areas that receive some sort of cut when a financial crisis occurs. Currently, there are benefits that are being cut by the Obama administration in order to help reduce the national deficit. These cuts are going to affect individuals who are currently using Medicare, so if you or someone you know and love receives benefits from Medicare, there are a few different altering adjustments you need to be made aware of. This way you can try your best to plan accordingly.

For starters, low-income seniors who receive Medicare are going to see a cut in benefits ranging from seven to eight percent starting in the year 2014. While these cuts can be reduced or overturned, most likely it is going to continue as scheduled. It is difficult for the president's administration and the senate to agree on cost cutting measures, so when one does go into affect it is likely to keep this same planned cut.

There is a different service that will be coming to pass though during the same time period. This is known as Medicare Advantage, which is similar to Medicare, although it is offered by private insurance providers to individuals who fall in the lower-income levels. One of the major reasons the Medicare Advantage act is coming into play and why Medicare is receiving a slash in benefits is because of the upcoming Affordable Care Act, also known as ObamaCare. The ACA is going to reduce Medicare benefits and raise taxes in order to eventually pay for expansions of Medicaid and other subsidies throughout the health insurance exchange.

As of right now, about 14 million Medicare beneficiaries are going to see a cut in their benefits. If you are looking for additional coverage to pay for the lack of services from Medicare or from the cuts that are going to occur in the coming months, there is a service known as Medigap that allows you to pay for supplemental insurance coverage.

Currently, the cuts are only going to basically hit the lowest income levels, but although the drop in Medicare is going to be seen and felt for the first few months of 2014, the increase in coverage through the ACA, which is designed to increase the services a low-income family or individual receives, should not only fill in where Medicare left off, but provide additional benefits and services as well. So while the cuts seem a bit drastic initially, the effects will not be long term and should only last a few months until the ACA is finally in full swing. Due to this, it is best to simply be prepared for the first few months of 2014, just so you know how to plan accordingly. If you plan on going in for any checkups or doctor appointments it is best to do them all at the end of 2013, so you can go a few months (if not longer) without the checkups, at least until the ACA starts up. Once it is up and running you'll be able to continue on your regular schedule. Of course, if you need the checkups during a set period of time it is important to follow these schedules.

While the Medicare cuts are coming in the upcoming future, you are not going to be without benefits for long. The slight drop in benefits is to help pay for the upcoming ACA, which is designed to increase the overall medical benefits you receive and have available access to. Ranging from experienced physicians to nurses with a BSN degree, the quality of healthcare professionals should also continue to improve.