5 Medicare Myths

Americans, even those participating in Medicare, are remarkably uninformed and misinformed about the program. Most don’t realize that the program pays only about half the medical costs of the average beneficiary and doesn’t cover a range of care. The Washington Post tackles some of the myths about Medicare. I don’t agree with everything in this piece or even that these are five important myths about Medicare. It focuses mostly on political policy issues rather than practical questions of interest to those planning for retirement. But it is a start to a public discussion of the fact that people don’t know much about this very large and important program.

Most glaringly, the program doesn’t cap beneficiaries’ out-of-pocket spending. In 2007, for example, Medicare paid only half of the nearly $18,000 that an average beneficiary consumed in medical and long-term care, with the remaining half divided between out-of-pocket spending and supplemental insurers’ payments. One in four Medicare beneficiaries spends 30 percent or more of his income on health expenses, according to the Kaiser Family Foundation.