Healthcare in the United States is significantly more expensive than in any other developed nation. The US has the most privatized healthcare system in the world, in stark contrast with other first-world countries such as Canada and the United Kingdom.
The Affordable Care Act (ACA), signed in 2010, aimed to reform healthcare in several important ways. In particular, the Obama administration sought to make healthcare more accessible by expanding government-funded programs such as Medicare. Despite being around since 1965, when the Johnson administration created it as an amendment to the Social Security Act, Medicare had not been significantly reformed until recently.
While some Americans have benefited from it, such as those with pre-existing conditions that had previously caused their insurance premiums to skyrocket, others have found it to be inadequate. So you may be wondering if it’s a good choice for you.
Controversy surrounding medicare
Over the past decade there has been a lot of debate, on both ends of the political spectrum, on the value of Medicare. While Republicans suggested gutting Medicare completely and replacing it with controversial “insurance vouchers,” and Democrats advocated for raising the eligibility age from 65 to 67, moderates (and those many Americans with only an entry-level knowledge of macroeconomics) were left wondering whether Medicare was really the one-size-fits-all solution that was promised by the Obama administration.
The political climate has shifted undeniably and become increasingly polarized during the Trump presidency. As of 2019, Democrats are divided on their opinion on how the federal government should handle healthcare. The same question is still plaguing Americans ten years on: is Medicare actually better for the American economy over the long term, even though Medicare spending has risen dramatically?
Is the high cost of Medicare worth it?
When one considers inflation, Medicare spending per beneficiary rose 400 percent from 1969 to 2009. This means that today’s aging Americans (and a few younger people who qualify for Medicare) are paying far more than their parents ever did. At first glance, this might seem less than appealing, especially for Americans with pre-existing conditions. However, government data suggests that despite these high costs, some 20 million Americans are benefiting largely from the amendment.
Rewind back, for a moment, to 2010, when the ACA was enacted. You may recall that the amendment was expected to decrease the national deficit by nearly $145 billion. The cost of Medicare was offset by taxpayers’ contributions through purchases of eyeglasses, hearing aids, and indoor tanning sessions. In 2017, when the Trump administration attempted to repeal the ACA, it was unsuccessful, although they did scale back the outreach program and enact more stringent eligibility criteria.
Compare Medicare with private insurance
One of the strongest arguments made by economists in favor of Medicare is how expensive private insurance is in comparison. Although America has a well-known individualistic mentality, and as such many Republicans and Democrats alike see the high cost of Medicare as a personal obstacle to overcome, macroeconomics are a different matter.
And the statistics about the collective tell a vastly different story. Medicare saves America money over the long term in comparison with private insurance. When the ACA lowered the age eligibility by a mere two years, millions of elderly Americans were able to remain on their Medicare plan rather than turn to the only other available option: private insurance.
Why private insurance is viewed with disdain by many Democrats is its high inflation. No one is denying that Medicare has failed to adequately control costs, but private insurance companies have done a much worse job of it. Premiums rose 700 percent over the same fifty-year time span.
It’s clear that, despite unfortunately high premiums in the public sphere, the private is more willing to take advantage of aging Americans with limited options. If you’re over 65 and have been using private insurance, you might wish to consider getting a Medicare insurance quote to consider alternatives.