With a greying population, Medicare costs are anticipated to rise drastically over the coming decades, and with each passing day, each one of us approaches the day where, God willing, we would be covered under a Medicare Program, either upon reaching the age of sixty five, or if we are tragically afflicted by a covered illness, such as Lou Gehrig's Disease or End State Renal Disease. Medicare is a sacred trust to some who are under the age of sixty five, such as the widow or widower of an deceased spouse, or in some cases, for disabled children. In 2002, nearly 40.5 million people were enrolled in Medicare. Medicare is a wholly federally funded and administered program, unlike Medicaid, which is partially funded by State and County governments.

As a response to political pressure, and to meet the needs of the public, Medicare Coverage includes Hospital Coverage (Part A), Medical Insurance (Part B) and Prescription Drugs (Part D). In contrast to hospitalization and health insurance coverage, the Medicare prescription drug plan is means tested, and allows for a cash subsidy of $600 per year to help defray prescription drug costs for low-income people. Recently legislation provides for higher premiums for enrollees who earn more than $80,000 per year and subsidies to encourage private insurance companies to offer products that can compete against Medicare benefits.

With the rising cost of health care, the vast influx of new people into the retirement system, and the longer life spans that people enjoy, there will be increased pressure on the federal government, the payer of last resort, to finance Medicare, and pay for the care of eligible people. Creative ways will be needed to ensure the solvency of the system, so that future generations may benefit from quality health care.

What Needs to Be Done?

First, greater emphasis must be placed upon rooting out Medicare fraud at all levels. Medicare fraud costs taxpayers nearly $11 billion dollars a year in improper and fraudulently charged medical expense. Through a recent pilot program in California, New York, and Florida, the federal government sent private auditors to review hospital bills, and it has been reported that in one year, hospitals were compelled to pay back $247.4 million dollars in fraudulent billing. It is reported that audits will be expanded to all fifty states by March, 2008.

Hospital audits, of course, are only the tip of the iceberg, as a vast number of providers, ranging from physicians to dentists to chiropractors to physical therapists, enjoy Part B coverage. The federal government needs to coordinate its efforts more proactively with private lawyers and the public to bring so called "qui tam" actions against entities and individuals which attempt to defraud the government. Qui tam actions were originally used to prosecute corrupt military contractors. They can also be used to fight Medicare fraud.

In a Qui Tam action, the government or a private citizen called a "relator" can bring an action in federal court to prosecute health care providers who are defrauding Medicare. A better coordination is needed between federal officials and the private plaintiff bar to bring successful cases to court. Since anyone can be a relator, government outreach is urged to the AARP and other groups with an interest in protecting senior citizens against predatory or dishonest healthcare providers.

Greater consumer choice and flexibility are also recommended, and should be encouraged. Outside of catastrophic illness or permanent disability requiring prolonged hospitalization or nursing home care, alternatives to Part B and Part D coverage through private insurance should be encouraged, and more flexibility recommended in the development of health insurance products which may afford enhanced coverage for those who can afford it.