Financial experts and individuals from all political divide in the U.S. have agreed that Medicare is having a crisis that needs a quick solution or else the program will fail. Currently, Medicare program is becoming unsustainable, and therefore stakeholders have to find means of rescuing before it fails completely. With the current Medicare structure, the only options are to reduce benefits, increase the eligibility age, restrict beneficial procedures, or increase Medicare taxes substantially. Nevertheless, there are various ways that can be used to solve Medicare crisis in the U.S. Some of these are as follows:
Since the biggest challenge Medicare is facing a financial crisis, it can be solved by increasing workers’ Medicare taxes by three times. This effect means that the working population will have to triple their current payment as their Medicare taxes. This increment is painful to the young workers but will boost Medicare funding and be able to meet all the benefits promised to the young working population. Besides this impact, there is also need to increase annual Medicare premiums for elderly couples.
Another strategy established to be effective in solving Medicare crisis is allowing more immigrants in the country. Studies show that immigrants pay billions of money in the form of Medicare taxes but benefit very little from these taxes. By allowing more people to immigrate into the country and enrolling them into Medicare system, more funds will be raised than they will be taken out by these immigrants. The immigrants are mainly young people who rarely qualify to draw benefits from their contributions because majority of them fail to meet all the requirements; such as illegal immigrants. The studies also showed that immigrants who qualify to receive Medicare draw fewer benefits than native-born citizens.
Medicare crisis can also be solved through competitive bidding. Currently, Medicare is subject to a plan known as fee-for-service (FFS) plan. The program allows recipients to visit doctors of their choice when seeking any service that is covered under the system. Additionally, Medicare provides a program referred to as private medical advantage (MA) which pays a fixed amount of money monthly. Therefore, Medicare can offer bids for FFS and MA plans and select the lowest bid that will reduce the misuse of money allocated for recipient’s benefits. It means that beneficiaries, that select programs with higher bids, will have to pay the extra amount from their pockets. To make the bidding more competitive, the Medicare can offer incentives in each plan.
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