Covid Under Currently Existing Medicare

Medicare is an excellent program, offering comprehensive healthcare at low cost to all Americans 65 or older. Medicare For All: would it ameliorate the devastating and ongoing effects of the corona plague? I’ll get back to that question in another post. Today I’m looking at the impact of already-existing Medicare on the covid epidemic.

Around 80 percent of covid-infected people who suffer severe symptoms are 65+ years old, so they’re already covered under Medicare. Hospital care is part of the standard Medicare benefit, offered at no charge to all recipients. Medicare coverage for doctor visits and medical equipment and medications is optional: it costs $1,700 in annual premiums — a non-trivial financial layout for retirees, most of whom live on limited fixed incomes. So there’s potentially a financial disincentive to seeing a doctor for those experiencing mild symptoms. Still, 94 percent of retirees buy the optional coverage.

Medicare also charges a deductible of $1,400 for each hospital admission, but that’s a lot less than hospitalization would cost out-of-pocket. The median length of hospital stay for covid survivors is 11 days, which would cost around $50K out of pocket. Overall, Medicare provides good coverage at low cost to most beneficiaries who seek medical care for covid.

The poorest among the elderly tend to suffer disproportionately from other chronic health conditions that exacerbate the effects of covid. Medicare charges significant copays for ongoing treatment of many chronic conditions. As a result, many Medicare recipients don’t have their comorbidities under control, increasing their likelihood of severe illness and death from covid.

Medicare isn’t socialized medicine; it’s a single-payer governmental mechanism for reimbursing the private-sector healthcare industry. Technically Medicare could, like private health insurance, go broke if its costs exceed revenues. However, since it’s a program of the federal government, Medicare can replenish its coffers through various means unavailable to the private sector.

As the name indicates, Medicare pays for medical care — services rendered on a fee-for-service basis. Medicare does not pay for maintaining the overall health of the population it serves. It does not pay for hospitals to amass inventories of ICU beds and trained staff and ventilators and personal protective equipment and testing facilities in anticipation of possible future spikes in demand — as we’ve witnessed. It does not pay for identifying the asymptomatic via widespread testing or for preventing contagion through social isolation and contact tracing — as we’ve witnessed. It does not pay for compilation and analysis of epidemiological data monitoring rates of contagion, prevention, treatment effectiveness, immunity, and mortality on either a national or local scale — as we’ve witnessed.

More than 40 percent of Americans who have died of covid were living in nursing homes or assisted living facilities. To an extent that’s inevitable when a disease preys mostly on the old and infirm. On the other hand, many nursing homes have become hot spots, with the virus rapidly spreading through residents and staff.  Medicare doesn’t cover long-term residential care, so improving safety standards at nursing homes is outside the program’s purview. Besides, nursing homes don’t provide medical care, which is outsourced to local doctors and hospitals on an as-needed basis and paid for by each resident’s Medicare.

In sum, Medicare makes it possible for most older Americans, regardless of wealth or income, to receive good medical care at low cost should they develop covid-like symptoms. Medicare does not anticipate or prevent or slow the spread of the epidemic, either through the population at large or through nursing home hot spots.


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