Financial Health and Sustainability of Medicare

Medicare was established in 1965 to cater for the elderly aged between 65 or more years. It also covers those of lesser years who have a permanent disability. Medicare caters for its clients regardless of their income or medical history. Even though Medicareplays a veryimportant role in the lives of its beneficiaries, it has also faced a number of challenges in how they get their funding and how to distribute them. This paper is meant to discuss the current financial health and the future projection on the financial stability of Medicare.

The cost of Medicare has slowly risen since its inception and it continues to do so as the time goes by, this has been as a result of several factors like; advances in medical technology, consumption or increasing effect of insurance and national wealth. Even though these factors contribute to the heightened cost of Medicare, the beneficiaries are not guaranteed the best services that are available because there is no body that governs or regulates the kind of services the health care providers give. Due to this factor most people find themselves spending more than they had anticipated in the health system just to ensure that they get the best services available when they need it.

The fact that Medicare covers even those with very low income has made it hard for the insurance givers to be able to cater for a lot of important medical needs that may be required by the beneficiaries. This is because their earnings are limited while the demand is still very high, it has forced the taxpayers to dig deeper into their pockets to support Medicare since a majority of the beneficiaries are unable to sustain it (Sistrom et al, 2009). Most of this people on Medicare report that they are either in fair health or poor health, meaning that they need Medicare. The same number are also have a mental impairment and another percentage are in long term care facilities that are very expensive thus a reason for Medicare’s financial dilemma.

Medicare does not cover some important services such as long term care, prescription drugs and dental services. This in turn does not limit out of pocket spending even though Medicare has a lot of deductibles. This gap has forced many beneficiaries to sort for multiple insurance to cover for some of the cost that Medicare does not cover. In return it has forced the beneficiaries to dig deeper into their pockets to ensure they can maintain the costs of their multiple insurance covers.

Some of the reasons why Medicare is finding it hard to improve their service delivery range from the payment services which are usually done on a fee-for-service basis. This in turn provides an avenue for the reward of more services instead of better quality. In many cases Medicarepayment services are not always accurate and thus it leads to over payments that do not promote quality. Due to the fact that payments are done depending on the type of service provided, providers do not feel like they have to be answerable for the type and quality of services that they provide. These providers also have no regulatory body to govern what they are and what they are not allowed to do in terms of provision of services and thus there is a gap in the Medicare system. And also the providers are not conversant with what they are supposed to do to improve the quality of services that they provide.

Much of the increase in healthcare spending is not attributed to improvements in the status of health, quality of life or even clinical outcomes (Peikes et al, 2009). Most of the recommended clinical services are not always followed and there is need for measures to be taken to ensure that all the recommendations are done and followed. Employers have been forced to lower the increase in wages of their employees while at the same time increasing the insurance covers for the said employees. This is because the beneficiaries who are less than 65 years old are covered by their employers in insurance. For the beneficiaries, the rising cost in Medicare means a reduced income in order to pay for their Medicare premiums (Wennberg et al, 2002). Both the service providers and the beneficiaries have a duty to improve the services offered and received respectively. This will In turn ensure value for the money spent on the Medicare premiums.

In order to ensure that the problems facing Medicare are permanently dealt with, it is necessary to first have a commission that solely deals with Medicare services. The providers have to be held accountable for the services that they provide in every situation that arises, they are also supposed to be rewarded for the improved quality of services and this will in turn psych them up to continue doing more in order to be recognized for their work. The current resources also need to be expanded in order to ensure that the providers do not feel overwhelmed with the tightness of their budget at any point in time. This will in turn ensure that the beneficiaries get quality services.

Because the payment system is also a very big issue, it has to be addressed in a way that there should be a payment system that favors both the providers and the beneficiaries at all times. All providers should be given the rates at which to charge the providers in order to ensure that some of them do not exploit the providers and that they offer services according to their rates and service provided. The health providers should also have incentives to ensure that they ar5e able to work together to provide the best services possible.

In conclusion, even though the system was introduced over 40years ago, a lot still needs to be done to ensure that it benefits both the giver and the recipient in equal measures. If this is done then for sure there will be a better and healthier society. The amount of funding that is given to Medicare should also be reviewed to provide the care givers with ease in their finances. It all has to start with all the parties involved to ensure smooth running of both Medicare and the care givers and in turn better services to the beneficiary.


Peikes, D., Chen, A., Schore, J., & Brown, R. (2009). Effects of care coordination on hospitalization, quality of care, and health care expenditures among Medicare beneficiaries: 15 randomized trials. Jama, 301(6), 603-618.

Sistrom, C. L., Dang, P. A., Weilburg, J. B., Dreyer, K. J., Rosenthal, D. I., & Thrall, J. H. (2009). Effect of Computerized Order Entry with Integrated Decision Support on the Growth of Outpatient Procedure Volumes: Seven-year Time Series Analysis 1. Radiology, 251(1), 147-155.

Wennberg, J. E., Fisher, E. S., & Skinner, J. S. (2002). Geography and the debate over Medicare reform. HEALTH AFFAIRS-MILLWOOD VA THEN BETHESDA MA-, 21(2), 10-10.