5 Ways to Save Medicare

BOSTON ( TheStreet) -- Forty-five years old and heading for life support.

That's the problem facing Medicare as controversial ideas to save it divide voters across the nation.

Left unchecked, Medicare is estimated to cost the federal government $929 billion a year by 2020. Politicians are seeking ways to stem the costs.

A lot is at stake for the approximately 47 million elderly and disabled Americans for whom Medicare helps pay for prescription drugs, hospital care and physician visits. Left unchecked, Medicare is estimated to cost the federal government $929 billion a year by 2020.

Republicans in Congress have rallied behind the budget reduction plan of Rep. Paul Ryan, R-Wis. His blueprint for reducing Medicare costs focuses on effectively dismantling the system and issuing vouchers for care to recipients eligible in 2022.

Democrats are sticking by cost reductions laid out in last year's Affordable Care Act, efforts that focus on ferreting out nearly a half-trillion dollars in cost overruns, fraud and abuse over a decade.

Aside from the broad strokes of these competing plans, other ideas have been floated to ease the financial stresses on the program. Some have been touted unsuccessfully for years. The following are five such ideas for saving Medicare:

Medicare for all
The best way to save the floundering Medicare is to expand it, claim supporters of a single-payer national health system.

Among the key proponents for "Medicare for All" are Reps. John Conyers Jr., D-Mich., Dennis Kucinich, D-Ohio, and Sen. Bernie Sanders, I-Vt. Their push, undiminished since such a plan was rejected during health care reform debates, would, as presented in an open letter to constituents and Congress, "provide all Americans with health care that would allow access to the doctor of choice without premiums, co-pays or deductibles."

Their call has been supported by such groups as the 18,000-member Physicians for a National Health Program. That group claims a single-payer health program would "cover all 51 million uninsured, upgrade everyone's benefits and save $400 billion annually on bureaucracy."

Earlier this year, the group lent its support to the Expanded and Improved Medicare for All Act, which would "replace today's private health insurers -- and the Obama law's individual mandate, which is being challenged as unconstitutional -- with a single, streamlined public agency that would pay all medical claims, much like Medicare works for seniors today."

"There's no doubt that expanding Medicare to all is both constitutional and the most cost-effective way to cover everyone," sys Dr. Garrett Adams, president of Physicians for a National Health Program. "A national single-payer program would save over $400 billion a year on bureaucracy and paperwork alone. Plus, it would use proven, effective cost-control techniques like negotiating drug prices and hospital budgets."

Raise taxes
One idea floated to bail out medicare, as well as Social Security, is as simple as it is bound to be unpopular: raise taxes.

Such a call would surely not be supported by Republicans who, following the Ryan plan, would nevertheless call for "means testing" -- limiting or eliminating the benefits the wealthiest could recoup via Medicare.

Among the more controversial tax measures touted for deficit reduction and the preservation of entitlement programs was a 0.25% tax on trades of stocks, bonds, derivatives and other financial instruments. Such a tax, proponents say, could raise as much as $150 billion annually.

While the Ryan plan promotes further tax breaks for high earners, it does call for means testing that would limit the ability of the wealthiest families to participate in the Medicare program equally with lower-income families.

Reign in drug costs
Conyers has cited the work of progressive economist Dean Baker in claiming that the government and beneficiaries could save as much as $600 billion dollars by 2013 if Medicare was granted the ability to buy in bulk and negotiate prices directly with drug manufacturers.

Since 2004, the government has ben prohibited from such direct negotiations. Efforts to include a change of policy into last year's package of health care reforms failed to gain traction amid opposition from pharmaceutical companies (most of which made clear they would support reform efforts otherwise).

Go global
A more controversial idea, mostly swept under the carpet by current legislators, dates back to 2009 and a failed bill proposed by Sens. Byron Dorgan, D-N.D., and John McCain, R-Ariz. The two proposed reducing Medicare's prescription drug costs by allowing medicine to be imported from Canada. At the time, the senators projected that such a move could save as much as $80 billion over a decade.

Drug industry lobbying helped kill the concept. The failure of that legislation, however, hasn't deterred reformers who would go even further, opening pharmaceutical trade globally and allowing recipients to use Medicare payments to pay for care arranged for, and received, overseas.

End defensive medicine
Republicans have long demanded legal reforms that would limit, and deter, malpractice lawsuits against doctors.

Such lawsuits, it is argued, lead to "defensive medicine," the administration of costly tests and procedures that may not be warranted or beneficial, but which protect caregivers if a problem is found later.

Eased of legal fears, doctors could lead in reducing Medicare costs by backing away from what might be considered excessive testing. Are cancer screenings necessary for 80-year-old patients, for example, who might not want or benefit from the ravaging treatments that would await them? Should hip and joint replacements be covered for patients with Alzheimer's disease or dementia who are incapable of the physical therapy needed to make them worthwhile? Although the benefits of tort reform are just as suspect, for now such tests and treatments continue to drain the system of millions.

-- Written by Joe Mont in Boston.

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