Medicare, Medicaid, Taxes and You

Since today is tax day, I am going to shake things up a bit, and discuss one of what may be one of the biggest tax drains we have, and why it is such a drain.  As you read this, please bear in mind that this is the industry I just left a few months ago, so this information is current.  I am also trying to keep it as practical and every day as possible so that you understand the full scope of just how bad this is.

First, understand that the original concept of Medicare is not a bad idea.  Pay into a fund for when you stop working, so that you have medical care when you are no longer working, and you need it the most.  Also, make sure that those who are unable to afford medical care due to circumstances beyond their control (children who have lost their parents, widows) have access to care as well.  Ok, acceptable concept.  Until it becomes a business, bloated and out of control.

 

Now, let me give you our subject – any age, non-gender specific.

Several hundred pounds overweight, extreme obesity.  Smokes heavily – multiple packs daily; drinks highly sugary, caffeinated sodas in extreme quantities; also eats extremely sugary and/or salty snacks with heavy starch intake, fast food in large quantities is normal; limited to no fresh foods, nutritional intake is very low; limited mobility, no exercise

Subject is extremely diabetic requiring dialysis 3 days per week, and is on oxygen; subject is also taking multiple diabetic medications, insulin, has multiple inhalers and is on medications for high blood pressure, high cholesterol, painkillers, and anti-depressant and anti-anxiety

Subject also does not work, and hasn’t been employed for several years.  He is receiving Social Security benefits, and all  medical expenses are covered through Medicaid and Low Income Subsidy (LIS – for prescription coverage)

To put it in another way – the subject created the problem through poor diet, poor habits and poor health choices.  Subject is continuing the same choices, and is being rewarded by Medicare.  This is where Medicare becomes a bad idea.

 

Now, lets talk about Medicaid.  Medicaid is the cash funding by Social Security to pay for the medical needs of those people who have qualified due to lack of income or disease.  By the way, all of the information I am about to relate is available on the Medicare website.  Medicaid information is on the SSA website.  The information is confusing and difficult to understand, but it is available.  I worked in the prescription insurance (Part D) side for 3 years for an insurance company.  I will explain what I can from that perspective.

First, Medicare themselves do not handle prescription insurance.  They set the requirements for what a Medicare basic prescription insurance (Part D) plan must have.  Medicare then contracts with insurance companies to provide the actual insurance.  For those who are receiving Medicaid/LIS benefits, SSA has additional rules that the insurance has to follow.

Here are the 2018 basic Part D requirements:

* $405 deductible (meaning you as the customer pay 100% of the negotiated price of the medications (each medication) until the deductible has been met.  Once your deductible has been met, then you pay your regular copay or coinsurance as set by your insurance company

* The coverage gap (donut hole) – once the total cost of all of your medications (not just what you pay – it’s how much $ the pharmacy gets in total) reaches $3750 then you are in the gap and for 2018 you will pay 44% of the negotiated price of generic medications and 35% of the price of your brand medications.

*  If you spend a total of $5000 out of your own pocket in deductible, copay/coinsurance and coverage gap costs, then you will enter catastrophic coverage meaning you will only spend 5% of the negotiated price of your medications.

Our subject, due to income and disease has the maximum allowable amount of LIS for medication coverage meaning the most the prescriptions will cost is $1.25 for each generic prescription and $3.70 for brand prescription.  It also means our subject will have a $0.00 deductible and the donut hole does not apply.  Once our subject reaches catastrophic coverage they pay $0.00 for all medications.

 

If you are staggering right now looking at those differences, you should be.  It was not uncommon for me to yearly totals for customers who met the general profile I gave you in the $100,000 (give or take a few thousand) range for total medication cost to the insurance company each year.  For cancer patients, or similar, the costs for one medication sometimes totaled over $65,000 for one month alone.

And all of this does not take into account what Medicaid is paying for oxygen tanks, diabetic supplies, doctor visits, exams, hospital trips, etc.  Nor does it take into account that the money that our subject is using to pay for all of the things that are creating these medical problems is coming from SSI Disability benefits – in other words, more tax dollars.  In other words, we the taxpayers are paying 100% for our subjects health conditions.  They pay $0.00.

Let me repeat that.  Our subject created the problem, and we the taxpayer are paying for it all.

Now, politics don’t belong on this page, but morality does.  Is it moral, is it Spiritual for us to render aid (ministry) to our subject.  No, it is not.  Nor is it moral or Spiritual for our subject to expect us to.  There is a proverb that says, “Give a man a fish and he will eat for a day.  Teach a man to fish and he will eat for a lifetime.”  To put it in simpler terms, it also comes down to personal responsibility.  Spirit would not have me pay for a person to destroy themselves, but instead help him find the way to heal themselves.  No, not even for my friends (and I have friends in this exact situation).  I will not hand my friend money to eat poorly for another day when I can help him learn to live a healthier physical, mental, emotional and Spiritual lifestyle to live for years to come.

 

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