Medicare/Medicaid Cuts
A Broken HealthCare System
When the Medicare & Medicaid bill was signed into law by President Johnson approximately 60 years ago, it started out as basic health insurance. Over the years, it has evolved to help more people from various walks of life. Unfortunately, few people know the difference between the two, and what it means for not only families struggling to make ends meet, but us as a nation, when funding for these insurances face cuts.
Let’s talk about specifics for a moment...
For those 65 years old and older.
Someone younger than 65 may be eligible if they have a disability or health condition that qualifies for eligibility.
This is strictly a federally funded program.
Monthly premiums are paid by the insured.
There are multiple different plans.
Coverage remains the same no matter which state you live in.
For those with limited income and resources.
Age does not play a factor.
Medicaid is jointly funded by both federal and state governments.
Each state runs their own Medicaid program, so eligibility may vary from state to state but the premise is the same.
There is no monthly expense; however, there may be certain out of pocket expenses depending on eligibility.
Misnomers
*Medicaid has not yet experienced budget cuts. However, MediCARE pay cuts were made official at the beginning of the year.
* When cuts are made to the program, services are not directly cut. It’s funding for those services that are cut. Meaning: services may or may not be covered- not because Medicare/Medicaid no longer offers said services, but because the organization or physician is simply not accepting Medicare/Medicaid insurance due to those cuts.
In a Nutshell?
When cuts are made they don’t get paid.
January 1, 2025
As of the first of the year, Medicare had a pay decrease of 2.83%. This means physicians are now getting paid less than they were last year. This is the fifth consecutive year in a row that a physical cut has happened. Yet, going all the way back to 2001, even if a “cut” didn’t happen, there wasn’t a pay raise, either. See the chart below.
This graph shows how inflation has continued to rise every single year, yet physician payouts have failed to follow the same trend.
“Who Cares? Doctors Make Enough Money”
Speaking specifically of physicians who run their own practice- when they don’t get a payout that reflects the trend of inflation, then they aren’t able to purchase the supplies needed, nor pay their staff enough to run their office. Basically, Medicare patients are costing them more than it takes to keep their business afloat; therefore, one of two things is going to happen:
One- they’re either going to significantly reduce the number of Medicare/Medicaid patients they see, or, refuse to take Medicare/Medicaid insurance altogether. This will leave said patients without medical care, painfully searching for a new provider.
Two- they’re going to shut down their medical practice and move to a franchise company like Cleveland Clinic, Summa, or University Hospitals. This solves their individual problem because they are cutting out the middleman and getting paid straight from the source. However, big companies are having the same problems only on a much larger scale.
As of 2023- 1 in 5 Americans have Medicare and/or Medicaid. That stat rises almost yearly.
Ramifications of Medicare/Medicaid Cost Cutting While Inflation Remains on the Rise
1. Medical practices (even hospitals) shut down.
- Since 2005, 150 rural hospitals have closed. Cost vs. benefit no longer matches up, so they have no choice but to liquidate. When practices (more significantly specialties) disappear then you have an ungodly amount of people without proper healthcare.
2. When hospitals and outpatient clinics close, where do people go for healthcare?
- Free Clinics. This would be a great solution, except that their funding and resources are already scarce as it is. Their staffing mostly depends on volunteers, so that means not only limited access to specialists, but a limit on the type of care they can deliver. Even in a perfect world- free clinics can’t survive giving away free health care if it means giving away free healthcare to everyone.
3. Free clinics such as, Open M Ministries, are forced to make a decision:
a. Reduce the services that they offer
b. Reduce the quality of services that they offer
c. Make their eligibility for care more strict
d. Charge a copay
e. Close
**None of these options are ideal to any extent.**
-If you can’t go to a free clinic, where else do you go? The ER, of course. The problem is, when everyone starts flooding ERs they can easily get backed up with as few as 40 to 50 people in the waiting room alone. With that many people, you have triage levels ranging from the moon to the earth, and if your complaint isn’t urgent (meaning you’re on death’s door waiting to talk to Jesus) you mind as well clear your schedule for the next 24 hours because you’re going to be there a while.
5. Even people who don’t have Medicare/Medicaid are paying more for health care.
-When fee-for-service goes up because the healthcare system is getting slighted due to Medicare/Medicaid cuts, then private insurances can also increase their premium and out-of-pocket expenses to meet demand. So when does paying for monthly health insurance become moot before you bite the dust and choose to pay for services out of pocket because it’s the same either way?
6. Overall quality of care becomes subpar.
-Even when you do manage to track down medical care, what’s the quality of it? What does the facility look like? Is it even sanitary? When Medicare/Medicaid funds get cut, hospitals and clinics are more than likely running around with one shoe off, one shoe on, cutting corners and cutting staff desperately trying to make up the difference for those losses. This, consequently, leads to less than desirable care.
When Medicare/Medicaid programs receive pay cuts, it doesn’t matter where you land on the poverty line- everyone suffers. When clinics and hospitals shut down, it doesn't just mean low income families are wrecked looking for healthcare- everyone loses. Some more than others, it’s true. When life hands you a basket of strawberries with a rotted one at the center- the disease spreads. You start off with a low paying job, which translates to food insecurity, lack of transportation, broken families, lack of quality education, and now, on top of everything else, little to no health care. Medicare/Medicaid cuts seem like a solution for the masses on the surface, but what it really does is create a domino effect of disastrous proportions.
What’s the Answer?
The United States spends more on health care than any country in the world. In 2022, we spent more than 4 trillion dollars. Why? It costs approximately $1.07 to manufacture a liter of saline; yet, your itemized hospital bill will show a mark up price of approximately $500 or more. THIS is the answer. THIS is where the first domino fell. If we can figure out a way to fix the overall price of healthcare then we wouldn’t be sitting here talking about how the effects of Medicare and Medicaid cuts are breaking our healthcare system, leaving people without jobs, and increasing disparities in health outcomes and access to healthcare.
