Medicare Planning and Trends Among Seniors

Allsup Medicare Advisor Seniors Survey
October 2012

An independently conducted telephone survey of 1,000 randomly selected individuals 65 years and older who currently have Medicare coverage

Thinking about retirement, are any of the following concerns for you?

61% – Future of Medicare
52% – Having enough money to enjoy retirement
43% – Paying for long-term care
41% – Paying for health care
38% – Outliving money
24% – Paying for housing

In general, how satisfied are you with your current Medicare coverage?

45% – Extremely satisfied
44% – Somewhat satisfied
6% – Not satisfied
5% – Not sure

As you may know, costs for the Medicare program are rapidly increasing. New funding or benefit restructuring will likely be needed. To keep the Medicare coverage you have right now, would you be willing to pay: 20% more/10% more/5% more/1% more?

32% – Pay 20% more
19% – Pay 10% more
10% – Pay 5% more
10% – Pay 1% more
23% – Pay nothing more
4% – Don’t know
2% – Medicare won’t need new funding

This survey confirms what we already knew. Most seniors are satisfied with Medicare, but a majority of them also are concerned about the future of Medicare, doubtlessly provoked by the current political threats to convert Medicare into a defined contribution (voucher) under the rubric of the imperative for entitlement reform. An intriguing inquiry in this survey is whether or not Medicare beneficiaries would be willing to pay more in order to keep their current Medicare coverage.

Sixty-one percent of responders indicated that they would be willing to pay five to twenty percent more to keep their current Medicare coverage. This probably does not communicate their belief that they should be paying more, but rather expresses the view that they are protective of Medicare and would be willing to reach deeper into their pockets to preserve the program.

It would not surprise anyone if the politicians used this result to decide to increase the out-of-pocket expenses for Medicare beneficiaries, again in the name of entitlement reform. But this would be a mistake. In a recent Quote of the Day message, we discussed Medicare’s failure to protect personal finances (…). Instead of increasing out-of-pocket costs, financial barriers should be removed by providing first-dollar coverage. You could do that by adopting a single payer system. Health care costs can be controlled by using the other economic tools of a well-designed single payer system.

Rather than using premiums, deductibles and coinsurance assigned to the individual Medicare beneficiary, an improved Medicare program that covered everyone should be separately funded through progressive taxes. The current proposal to adjust Medicare premiums based on income would seem like a step in the right direction, but it would add more unnecessary administrative complexity to Medicare financing. It would be far better to establish a single, separate universal risk pool, funded based on ability to pay, and then to provide health services based on need regardless of the individual’s financial status. We should totally separate health care funding from the delivery of health care services, just like we do with police protection, fire protection, highway systems, public education and the many other government functions that we rightfully take for granted.