Health Costs Continue Climb for Retirees

Just when your 401K has become a 201K we get the news that health costs for those retiring continues to climb. A couple retiring this year will need about $240,000 just for medical expenses today, an increase of +6.7% from last year. The costs come from deductibles, co-pays and situations that aren't covered by Medicare.

Want more good news? Only 12% of companies today offer insurance for retired workers according to the Employee Benefit Research Institute (EBRI). The reality is many people will continue working just for their health care.

The best advice? Start saving now not only for retirement, but for retirement health expenses.

2009 Medical Costs

Health care costs will rise 4.5% this year, to $8,160 for every man, woman and child in America according to a report from the Department of Health and Human Services. Crossing over the $,8000 line means that health-care costs are consuming a growing slice of our shrinking economic pie.

Estimes show that Medicare will become insolvent as early as 2016, years sooner than expected. In fact, taxpayers will be responsible for more than half of the nation's health care bill by 2016 due to the influx of Baby Boomers and expansion of Medicaid. Health care costs will rise to $13,100 by 2018.

Meanwhile the nunber of uninsured has grown to 48 million according to the Kaiser Family Foundation.

AMA Joins Lawsuit Over Payments

The American Medical Association is joining several state associations in suing two of the largest health insurers over a database they say was rigged to underpay doctors on out-of-network claims for more than a decade. Aetna and Cigna were both basing their payments on the Ingenix database of normal costs. United Health Group already lost $350 million to settle a separate lawsuit involving the AMA and the Ingenix database.

Cigna said prices charged by doctors are part of the problem because doctors in the expensive New York City market charge on average $214 for a 15-minute, out-of-network office visit. Health insurance companies may reimburse as much as $160 based on the Ingenix database while Medicare pays doctors $77 for the same visit.

Looking at those figures is it any wonder the AMA is terrified of a national health plan? Is it any surprise why it's so difficult to find a doctor who will take Medicare today when they can earn so much more for the same amount of time?

Clearly the costs of health care today are at the breaking point snd something has to be done. Cooking the books in a database isn't the way to solve the problem.

Stimulus Bill Opens Health War

The proposed stimulus bill includes $1.1 billion in funding that would research and compare medical treatments, a step some portray as the first step to government rationing of health care. The drug and medical industries are gearing up their powerful lobbying forces to fight this effort to make medical expenses accountable for patient outcomes.

A coalition called the Partnership to Improve Patient Care includes the lobbying arms of the drug, device and biotechnology industries as well as patient-advocacy groups and medical-professional societies. Coalition spokesman David Di Martino says the research envisioned in the House bill may be used "in an inappropriate manner that may limit treatment options for patients." In other words, their profits.

Anyone who's read Shannon Brownlee's award-winning book OVERTREATED: Why Too Much Medicine Is Making Us Sicker & Poorer knows that cost does not equate to outcome in medicine today. I highly recommend it to anyone who wants to learn about the economics of health care in America.

One interesting thought is that the medical world may be terrified of this type of research because it might show that the cost-benefit ratio of complementary and alternative medicine is superior to the drug-based medical system we have today. CAM treatments are usually much less expensive than standard medical care and it can produce positive results.

I'm living proof of it. What I spent on CAM treatments to restore my health was a fraction of what was spent on specialists in Dallas and a trip to the Mayo Clinic.

The fact is the stimulus bill is the opening round of a new battle to change health care in America and the status quo are going to fight it.

Medicare Progress

Recently, Medicare agreed to provide coverage for the Ornish Program, the only medically-proven therapy to reverse heart disease without drugs or surgery. This is the first time that Medicare has covered a program of comprehensive lifestyle changes, something insurance companies aren't even doing yet.

Way To Go Medicare!

It's good to see government health care leading the way, especially when it involves saving money and avoiding drugs and surgery. Dr. Ornish and his colleagues are now training and licensing health professionals from around the world in his program for reversing heart disease for free in an open source model ... a radical new trend in medicine.

You may have read about Dr. Dean Ornish in the news lately. Dr. Ornish has expanded his research and recently directed the first randomized controlled trial demonstrating that comprehensive lifestyle changes may stop or perhaps even reverse the progression of prostate cancer. The initial results demonstrated that 500+ genes were modified by lifestyle in only 3 months, basically turning on more cancer-fighting genes and turning off genes that support cancer growth. For those of you familiar with Bruce Lipton's work or UnBreak Your Health you recognize this is the new science of Epigenetics.

Money and Longevity

We assume that if you spend more on health care then you'll live longer and better, and as usual that may be wrong. New research from Dartmouth College illustrates the discrepencies in our nation's health care system.

While Medicare spending for chronically ill patients in the last two years of life at UCLA cost $93,842 it cost $53,432 at the Mayo Clinic's main teaching hospital in Rochester, Minnesota. Many people have pointed to the variations of medical policy and procedures as one of the main factors for cost and waste in our system. The care you get, and what it costs, depends on where you live. While chronically ill patients spent only 10.6 days in the hospital in Bend, Oregon they spent nearly 35 days in the hospital in Manhattan.

This is important because Medicare spends $1 for chronic illnesses out of every $3 spent. The next time someone tries to tell you that Western medicine has all of the answers, remind them they don't even know how much variation there is in system.

A Little Sunshine

The dark and mysterious world of mainstream medicine is getting a little more sunshine thanks to a new government website. Now Medicare and Medicaid customer satisfaction and performance information is available at www.hospitalcompare.hhs.gov so you can learn about the hospitals in your area and make an informed choice.

The data is the result of a 27-question survey that more than 2,500 hospitals around the country gave to patients between Oct. 2006 and June 2007. Hospitals were required to survey at least 300 patients but many questioned many more.

It's a small step towards consumer education, but a good one!

Hold On To Your Wallet

Health-care spending in the U.S. is projected to hit $4.3 trillion by 2017, nearly double the current $2.3 trillion. Medicare spending will reach more than $2 trillion consuming nearly 20% of America's total Gross Domestic Product (GDP).

Much of this change is driven by the aging Baby Boomer population but the failures of the current medical system must also be faced. The current system of private insurance means that every doctor is faced with multiple forms with different rules and criteria in a system of denial management by insurance companies. It's estimated that this factor alone amounts to 1/3 of the total health care cost today.

Unnecessary medical tests and procedures driven in part by liability lawsuits and partly by our top-heavy ratio of specialists to general practitioners means that perhaps as much as another 1/3 of total costs could be reduced by adopting a different medical approach. The majority of other industrialized countries employ a majority of general practitioners to prevent health problems, an approach that produces lower costs and higher world rankings. (America ranks #40 in longevity today.)

Developing a new, affordable health care system is past urgent, it's now critical. Health-care spending is projected to grow on average 6.7% each year in the next decade, far greater than the 1.9% growth in the general economy.

Adding complementary and alternative medicine into the mix is one ingredient in the new recipe for better health and lower costs, as it is in other countries.

Medical Accountability

Health care insurers are beginning to adopt the same policy as Medicare in refusing to pay for medical errors. The 28 most common "never events" include mistakes like leaving an object inside a patient during surgery, giving the wrong kind of blood, even bedsores. Best of all, many insurers are also making sure that hospitals don't bill patients for these errors when the insurance company doesn't pay.

Compiled by the National Quality Forum coalition these are mistakes that simply can't be justified in any way. The goal isn't to save money because these events are so rare, the policy is intened to focus hospital attention on safety, but the CDC estimates such errors add $4.5 billion to the nation's health care tab each year.

Does your health insurance have such a policy? It may be worth checking out since their contracts with hospitals may be the incentive to make changes to improve safety and care ... and that could literally save your life.

Senior Sales Pressure

It's that time of year again when seniors are almost attacked by insurance sales people trying to get them to buy private Medicate Advantage insurance. The overly aggressive and deceptive tactics have brought warnings by Medicare and state regulators.

One of the problems not explained to seniors is that many doctors and hospitals won't accept private Medicare plans so they should check with their doctor to be sure he'll accept it. These private insurance programs are sold as an alternative to Medicare for better benefits.

In many cases the insurance "salesman" is actually just looking to steal their social security number for identity theft. If you have any questions or concerns contact Medicare at 800-633-4227.