In 2017, Medicare expenditures totaled $702 billion making it the largest government-sponsored healthcare system globally. For the millions of Americans who have this healthcare, the benefits go far beyond these costs. Along with the introduction of private insurance carriers like BGA Insurance – Medicare Advantage NJ, Medicare has had a significant impact on local economies.
The United States allocates more than 15 percent of its yearly budget for health care, which is more than two times that of every other country in the world. As there are four parts to the Medicare system, there are specific groups in the medical industry that affect economic growth directly.
The Different Parts of Medicare Plans
Part A covers hospitalization, assisted living nursing home cost, home health and hospice care. Only 1 percent of Americans pay a premium of $1,340. For nursing homes, there is no deductible for the first 20 days. On day 21, nursing home patients pay $167.50 per day until day thirty. Patients pay for days 61 to 90 at $335 daily for care. On day 91, patients pay $670 per day and full costs after day 100.
The beneficiary is responsible for half of the cost for physician treatment as part of Part B. For low-income patients, Medicaid offsets the difference. The monthly premium for Medicare Part B is $134 to $426.60. The annual deductible is $183. The prescription drug plan premium is $33.50. If you are enrolled in a Medicare Advantage program, the premium is $30.
Part C is Medicare Advantage while Part D is for prescription plans. Premiums vary, so each person will need to contact medicare.gov to research plans and get premium costs. If you need assistance, you can call 1-800-MEDICARE. You can call your local state health insurance assistance program or visit shiptacenter.org. Medicare Advantage plan benefits include dental, vision and prescription coverage.
Medicare is financed through the United States federal budget (40 percent), payroll taxes (37 percent), premiums (14 percent), state payments (5 percent), supplemental security income (SSI) taxes (3 percent) and interest (1 percent). The payroll tax fund will be completely depleted by 2026. Funding issues have occurred throughout the history of Social Security, but the U.S. government has managed to keep Medicare sustainable.
In time, Medicare funding has allowed entrepreneurs to invest in the quality of care, procedural research, technology and additional support for providers, which has lowered mortality rates and increased the amount of money available for additional research:
- As Americans are healthier because of the availability of care earlier in their lives, it has reduced the economic impact on individuals and families who often use credit cards, income or bank loans to pay for more serious medical procedures
- The availability of insurance for the elderly also allows households to receive better quality of care without high out-of-pocket expenses
- The $702 billion in Medicare revenue goes directly back into local economies through their insurers, providers and consumers; this revenue boosts local economic growth
While there are financial implications, the availability of medical insurance supports not only the consumers but their providers and private insurers who pay forward their surplus through medical and business operating costs. As most insurance companies retain only a small portion of their Medicare payments, more than 95 percent of their revenue feeds into their economies.