Young couple (drive two Ferraris and own a $700,000 home) charged $21 for 3-day hospital stay. Average senior pays $1,364.

The corporate exec was sincere when he explained to me why he didn’t pay most of his workers a wage higher than $14.25 an hour:

That rate keeps them under $30,000, and that’s about the cutoff for Medicaid and many other public assistance programs for a family of three.  Without Medicaid they would have to pay for health insurance and that isn’t cheap.

A raise to $31,000 can leads to a disaster for a family:

This year, the average (health insurance) annual premiums are $7,188 for single coverage and $20,576 for family coverage. The average premium for single coverage increased by 4% since 2018 and the average premium for family coverage increased by 5%. The average family premium has increased 54% since 2009 and 22% since 2014. – Kaiser Family Foundation (KFF).

Ferrari plus nearly free healthcare!

Even if your company offers a health plan, getting a raise can still be very bad news. In those plans, some $11,000 in annual premiums on average are paid by a family, and the remaining $9,500 by employers.

The much-touted $15 minimum wage (equals equals $31,200 a year) means no Medicaid for your family. That leaves you only eligible for private or company insurance that reduces your pay $2.50 an hour minimum and up to $10 an hour maximum.

No wonder that 75 million Americans are on Medicaid today, compared to just 50 million in 2010.

It is especially attractive, because if you work “under the table”, or have a business that “reports” low income, you can get Medicaid regardless of huge real estate investments or even owning multiple mansions, thanks to changes enacted by the Affordable Care Act.

Someone could own a home worth $850,000, a Lamborghini, a second vehicle, hundreds of acres of farmland, and still technically be eligible for Medicaid. These Americans would be considered wealthy by any standards, but by sheltering their net worth under the current tax laws, they would be legally eligible for Medicaid. – KFF

The only folks who can’t take advantage of the goodies in Medicaid (and still own terrific assets) are all 47 million seniors on Medicare. The elderly face a unique “assets test.” That’s just for seniors, and there are no exceptions for the elderly.

The insane rule is that you can’t have more than $2,300 in the bank, other savings, etc. The government can even investigate you to learn whether you made large gifts from prior savings to your children during the past 60 months.

The usual reason that seniors want Medicaid is to pay for nursing home care. Medicare pays nothing, but Medicaid covers it all. About 40% of nursing home residents are on Medicaid.

America’s nursing homes charge more than $85,000 annually at list price and that’s what you’ll pay until you are dirt poor and qualify for Medicaid. Insurance companies and Medicaid cut special deals and pay nowhere near that amount.

Some friends have suggested that Medicaid and Medicare are about the same thing.

Let me count some of the ways they are starkly different:

  1. Annual premiums: Medicaid is $0. Medicare is minimum $3,468 a year for a couple. High earners pay as much as $5,700 each.
  2. Inpatient hospital care:  Medicaid co-pay is $3 for each day in the hospital, up to $21 for the entire stay. Medicare co-pay for even one day is $1,364, and if you re-enter the hospital after 60 days, each time another $1,364 is due. For Medicare hospital days 61-90: an added $341 co-pay each day, and days 91 and beyond: another $682 each day. After 60 days beyond the 90 lifetime limit, Medicare pays nothing and you are responsible for all hospital bills.
  3. Short Procedure Unit: Medicaid co-pay is $3 for Surgical Center (ASC) visits. Medicare co-pay is 20% of the charges, no matter how high the cost. Some common procedures may be billed in excess of $10,000 list price.
  4. Brand name drugs: Medicaid co-pay is $3 for each prescription or refill. Medicare requires monthly co-pays up to $100 or more per prescription, depending on the drug. For example, Xarelto co-pay is about $1,200 annually. Medicare pays for all additional drugs only if an individual spends more than $6,350 a year out-of-pocket.
  5. Outpatient x-rays:  Medicaid co-pay is $1 for the total  service (not for each x-ray). Medicare co-pay is 20%. X-rays generally cost $260 to $460 each. Some are more than $1,000 list price.
  6. Physician visits: Medicaid co-pay is $0. Medicare co-pay is 20%.
  7. Chiropractor visits: Medicaid co-pay is $1 for each visit. Medicare will only cover chiropractic care as a treatment for a condition called spinal subluxation. Co-pay is 20%.
  8. Emergency services: Medicaid pays everything. Medicare co-pay is 20% of all charges, plus set fees for procedures and supplies. Average ER visit is $775.
  9. Blood and blood products: Medicaid pays everything. Medicare minimum co-pay is 20% of all charges.
  10. Drugs: Medicaid pays all costs for high blood pressure, cancer, diabetes, asthma, epilepsy, heart disease, psychosis, HIV/AIDS, glaucoma, depression, and anxiety drugs, as well as anti-Parkinson agents, anti-manic agents, anti-convulsants, anti-neoplastic agents, oral contraceptives, test strips, lancets, meters, and needles. Medicare co-pay is 20%
  11. Dental visits: Medicaid pays everything. Medicare pays nothing.
  12. Skilled Nursing Facility: Medicaid pays everything. Medicare co-pay is $0 for days 1-20; $175 for days 21 to 100; and you pay everything for days 101 and beyond.
  13. Nursing Home Care: Medicaid co-pay is $0. Medicare pays nothing for long-term care.

If all that doesn’t disturb you, consider the stupidity of the current political promise to enshrine Medicare for All, a program with fatal flaws that date back to its inception in 1965.

Medicaid for Everyone has a more logical beneficial foundation, and maybe this time it could include the old, the sick, those soon to die, and not just the young and sometimes quite wealthy.

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