If you think there’s no hope for bringing health care costs down, think again. Cutting waste in Medicare and preserving it to help seniors for many years to come has been addressed with a new system of competitive bidding.
This change addresses the cost of common medical equipment and supplies that are used to help seniors get the care they need to stay at home, such as diabetic supplies, oxygen equipment and wheelchairs. According to multiple government reports, a fee-based system, such as that used by Medicare, is frequently subject to fraud.
Can Medicare Cut Costs Nationwide By One-third?
A new national bidding system is projected to cut Medicare costs by an average 32 percent. It’s also anticipated that the average savings will be even greater in states like Florida. These savings can benefit not only seniors, but taxpayers as well.
Here’s an example of this cost cutting: In Central Florida, the cost of an oxygen concentrator averages about $173.17 monthly. That could drop down to just $115 a month. Nine Florida metro areas are scheduled to participate in the new system beginning next year. As this bidding system spreads across the nation, it’s estimated to save approximately $17 billion in a single decade, according to Medicare deputy administrator Jonathan Blum.
Will Medicare Supplement Plans Change?
These and similar savings are anticipated in 2011 unless efforts to kill the new bidding system defeat it. U.S. Rep. Kendrick Meek is trying to stop the new system, but has not had much luck so far.
With such drastic reductions in the cost of medical equipment and supplies, the Medicare Supplement industry could feel governmental and public pressure to either lower plan premiums or expand plan benefits. After all, if Medicare supplemental insurance spends less, why not pass at least some of the savings back to seniors?
And The Winner Is…
Several medical equipment and supply companies have already submitted bids, and the Centers for Medicare & Medicaid Services will begin offering contract proposals. Their final decision will come this September so it may take a while to see whether this new system will lower premiums or increase benefits among Medicare Supplement Insurance Plans.
There’s also the possibility that companies not awarded contracts will succeed in lobbying Congress to thwart the system. With Medicare already running on empty, that seems like a long shot. This new bidding system, the coming healthcare reform changes and the aging U.S. population may all have an impact on Medicare Supplement Insurance in coming years. One way to stay on top of this and be sure to get the advantage of lower premiums and/or expanded coverage is to request an annual review of these plans.
In the long run, it pays to shop around while your health makes changing plans simple. It’s almost impossible to switch to different plans when your health deteriorates. Compare new plans as they come to market on a regular basis, and you’re more likely to find better values and save more of your hard-earned retirement assets.
