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Cuts to Medicare Mean Higher Demand for Cheap Health Insurance Posted: November 19th, 2009

By Sanford Ellowitz

Sanford Ellowitz is a New York State licensed insurance agent. He is also a Certified Financial Planner and a Certified Employee Benefit Specialist. He has over 25 years experience in the insurance and financial services industries.

Cuts of 21.2 percent are scheduled for Medicare reimbursement rates, which means that many seniors won't be able to cover their healthcare costs. A cheap medical insurance plan to supplement these benefits may be the only answer. Find out more.

Scheduled Cuts to Medicare: Time for Seniors to Find Cheap Health Insurance

CMS, the Centers for Medicare and Medicaid Services, announced that payments to doctors will drop an average of 21.2 percent for 2010, unless proposed Congressional action changes this. Hospital outpatient and ambulatory surgical centers will also face these cuts. Cuts like these may increase the national demand for cheap health insurance because many seniors will need a supplemental plan to cover their rising costs.

Why Reimbursement Rates Face Cuts

The cuts are based on a formula devised by Congress 10 years ago in order to control Medicare's costs, which are estimated to top ��������� trillion dollars in 2009, or 20 percent of total U.S. healthcare spending. Further cuts are scheduled for the next several years, on top of the cuts proposed for next years.

Beside these cuts, heart and cancer doctors had been scheduled for even more drastic fee reductions. The intent was to make lower payments to these specialists, in turn leaving more money in the system for lower-paid physicians and nurse managers, who focus on preventive care. The proposed cuts for these doctors have now been scaled back.

Pros and Cons of These Cuts

Without cuts to reimbursement , the trust fund that finances the system will soon be overwhelmed. This will be exacerbated by the coming wave of baby boomers who will be reaching Medicare eligibility in the near future.

Physicians and other healthcare providers argue that any cuts to their fees will limit patient's access to healthcare, as many doctors will be forced to decline care to Medicare enrollees or even have to discontinue their practices all together. This is particularly true for specialists, who will see the greatest cutbacks.

Cutbacks Are Politically Sensitive

Medicare has grown, since its inception in 1965, to cover nearly 45 million Americans, or approximately 15 percent of the U.S. population. As a result any cuts have far reaching effects. In a national Commonwealth Fund survey, Medicare beneficiaries reported a higher level of satisfaction with their health coverage than those insured by employer-sponsored plans. Taken together this accounts for the difficulty Congress faces as it attempts to change the system.

If you're affected by these cuts to Medicaid and Medicare--more specifically to the extra costs that will come with them--now is the time to start getting health insurance quotes and seeking the cheapest medical insurance that can cover the extra costs.

Sanford Ellowitz