Health Insurance and Medicare Essay Example

rental. Payments go directly to service providers rather than beneficiaries. Vladeck reports that Medicare accounts for up to forty percent of income for average US hospitals. Physicians treating patients under this plan must decide whether to accept the Medicare allowable fee or use balance billing when their fees exceed the maximum charge allowed by their specific plan. Nonetheless, many physicians argue that these allowable fees are below actual service costs which results in shifting expenses onto private patients. Hospitals' payment system is determined beforehand through the prospective payment system (PPS), particularly teaching ones; while many managed care organizations base their payments on capitation.In his analysis, Vladeck scrutinizes the impact of Medicare contractors - privately-owned insurance firms that oversee administrative tasks - on Medicare through interest-group politics. The retrospective fee-for-service model enables providers to pass on all expenses indiscriminately without consideration for production efficiency. This results in patients having no motivation to seek more affordable healthcare services. Within the political system, Vladeck emphasizes that various stakeholders such as Medicare contractors, hospitals, doctors and HMOs have a significant interest in Medicare policy and behave accordingly. Concerning distributive politics related to Medicare, there is an issue with the distribution of funds across areas due to payment rates under capitated plans based on the Balance Budget Act. Distributing payments justly under capitation where healthcare providers receive a fixed cost per person for medical benefits is complicated by market fluctuations influenced by price changes. Healthcare expenditure responsibilities must be assumed by Americans if future modifications are made by 2010 regarding Medicare policies. An avenue for increasing disposable income towards covering high deductibles could be contributing to Medical Savings Accounts (MSAs),

but low-income earners may struggle with contributions and experience financial difficulties when paying out-of-pocket medical bills.Despite ongoing debates, the government plans to promote MSAs for expanding healthcare coverage. These are savings accounts that cover medical expenses not included in insurance plans and allow accountholders to save money on medical expenses through tax-deductible contributions. Self-employed individuals can accumulate funds over time or employers can contribute on behalf of their employees. To qualify, individuals need high-deductible medical insurance for extreme situations. Some critics argue that higher earners may benefit more from MSAs than lower earners due to their financial capabilities. However, the government considers this system feasible in making healthcare accessible for all.