Health Care and Retirement
Although I am primarily concerned in my job with retirement, it’s been difficult to ignore the contentious debate going on about health care. Since health care is one of those issues that retirees (regretfully) will have to deal with, I thought I’d take a moment to tell you what I see, as an interested observer.
First of all, I find it unlikely that nothing will happen. It seems like everyone agrees that something needs to be done, even though not everyone is proposing the same solution.
As I follow the debates, I see two main issues:
(1) covering health care needs for everyone, or most everyone, and
(2) the cost of health care
While the two are necessarily linked, I see them as separate issues. For my part, I would have tackled the cost issue first, and then the coverage issue, but it seems that Congress has decided to link the two together, for better or worse. By the way, I don’t buy the talk of rationing care, and I don’t see that there will be “death panels”.
Within the coverage issue, I see some people making (what I consider to be deliberate) misrepresentations. To begin with, I do believe that everyone should have access to health care. However, being insured is a different concept than having access to health care.
The debate shouldn’t be whether 47 million people are uninsured; rather, it should be whether everyone has access to the care they need, when they need it.
Even those who talk about the insured make the mistake of throwing all insured into the same category. I can tell you that not all insurance is the same, and some policies aren’t much better than being uninsured.
Finally, and most importantly, a lot of what I read seems to say that the employer has some obligation to provide health insurance. I think nothing could be further from the truth. I look at my health insurance as a portion of my compensation.
My employer has group buying power, and so can get me a good deal on something I want. While I would be disappointed if that health insurance were dropped (and I would consider such a change to be a cut in my compensation), my employer has no more obligation to provide health insurance than it does to provide me with a car freshener.
The cost issue is one that I don’t think there are easy answers to. The politicians say they are targeting the unholy trinity of “waste, fraud, and abuse” in the system. I think I first heard those three items from Augustus Caesar, but I’d have to check my planner notes to be sure (I was doing it on papyrus back then).
If fraud, waste and abuse were really the solutions, why isn’t the government going after the perpetrators right now? No legislation is needed to crack down on fraud or abuse. Why the implication that fraud and abuse will only be acted upon if coverage is expanded?
There’s also talk that health care companies are getting excessive profits. My guess is that most companies are in business to make a profit (other than not-for-profits). When times are good, they make more profits. When, then, does a profit become excessive? And by the way, if you’re invested in one of these companies, as many of you are through whatever mutual funds you may hold, do you think that your earnings have been excessive on your account?
The two areas I see as really having the potential for cost savings are ineffective care and inefficient care. We need to change our tort system. We need to make preventative care more accessible (not – ugh! – wellness care, which costs more than it saves). We need to allow and encourage nurses and nurse practitioners to treat minor ailments.
But, let’s face it---this is going to cost us, as a country, more. There’s no way that giving more and better health care to more people isn’t going to cost something.
Right now, the bill looks like it will run at least $300 per year per person. So in some form or fashion, it’s going to cost the average family of four approximately $1,200 a year to expand health care. That’ll be paid through higher taxes, higher costs, foregone compensation, or some other method. For those of us who have been blessed with above average income, the cost will be higher, perhaps substantially.
So, how does this all tie back to retirement? Well, for one thing, those of us who continue to age (and not many of us have found a way to stop the process) will need more and more health care, which will cost more and more. Medicare is going to be in crisis here shortly, and that could make benefits less robust.
Some of the current talk is about cutting back on the Medicare Advantage programs, which will mean more out-of-pocket expense. Payouts for medical procedures may be cut back, and doctors talk about not taking Medicare patients.
All in all, my guess is that once I get to retirement, Medicare will cover less, so I will pay more, and the amount of time I spend navigating the health care maze will increase substantially.
Not necessarily a rosy picture, but I think it’s realistic.
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