Many seniors and disabled Americans grapple with high health care costs despite being enrolled in Medicare, according to research published this week.
More than 50% of seriously ill Medicare beneficiaries have struggled to pay for care
A survey of Medicare beneficiaries published Monday in Health Affairs found that 53% of seriously ill respondents reported having struggled to pay for medical care.
Researchers from Harvard University conducted the study, which was funded by the Commonwealth Fund. The survey included traditional Medicare and Medicare Advantage beneficiaries ages 65 and older, as well as disabled beneficiaries younger than 65. It defined "seriously ill" as beneficiaries who have a medical condition that had required two or more hospitalizations and visiting three or more doctors over the past three years. The survey included responses from a total of 742 beneficiaries who were considered seriously ill. Those respondents most commonly reported having cancer, diabetes, and heart disease.
According to the survey, the respondents reported having the most difficulty paying for prescription drugs, and the second-most difficulty paying hospital bills.
The survey found that more than one-third of respondents reported using all or most of their savings to pay for medical bills. Further, 27% of respondents said they had been contacted by a collections agency regarding medical bills, and 23% said they were not able to afford basic needs, such as food, heat, and housing. According to the survey, close to 50% of respondents reported feeling emotional or psychological distress, and about 25% said their medical costs have placed a significant hardship on their families.
The researchers were surprised by the survey's findings, as Medicare generally is perceived to provide good coverage for beneficiaries, the Associated Press reports. Michael Anne Kyle, the lead author of the research and a doctoral candidate at Harvard University, said, "We did not expect to see this extent of financial hardship in the Medicare population."
Tricia Neuman, a Medicare expert at the Kaiser Family Foundation (KFF) who was not involved with the survey, said the findings "poin[t] to a real issue that has gone under the radar." She explained, "Survey after survey shows that people are satisfied with Medicare, but this analysis shows that people with Medicare who have serious health problems can face very high out-of-pocket costs, and that's an issue that hasn't gotten much attention."
Judy Feder, a fellow at the Urban Institute's Health Policy Center who was not involved with the study, said although "Medicare is a hugely valuable program, … it has holes." For example, she noted Medicare's so-called "doughnut hole," which is a gap in Medicare prescription drug coverage, as well as Medicare's lack of a cap on beneficiaries' out-of-pocket costs.
Kyle said lawmakers should focus more on the catastrophic costs facing some Medicare beneficiaries. "Out-of-pocket costs are very concentrated," and "[t]he sickest population is also getting the biggest bills," Kyle said. She added, "Especially if you are sick over time, you are slowly draining your bank account."
Medicare beneficiaries face high out-of-pocket costs
Separately, an issue brief published Tuesday by KFF found Medicare beneficiaries' out-of-pocket health care costs—including spending on medical and long-term care services and insurance premiums—averaged $5,460 in 2016.
The issue brief focuses on beneficiaries enrolled in traditional Medicare coverage. For the brief, researchers analyzed 2016 data from the Medicare Current Beneficiary Survey.
According to the brief, Medicare beneficiaries spent the most on long-term care, which is not covered by Medicare. Beneficiaries with conditions that are likely to require long-term care—such as dementia, Alzheimer's disease, and Parkinson's disease—spent the most out-of-pocket when compared with other beneficiaries. Older beneficiaries, women, and beneficiaries with poor self-reported health also spent more out-of-pocket when compared with other beneficiaries, the researchers found.
Overall, the researchers found that 50% of traditional Medicare beneficiaries spent at least 12% of their incomes on out-of-pocket health care costs in 2016, while about 25% spent at least 23% of their incomes on such costs, and 10% spent nearly 50% of their incomes on such costs.
The researchers wrote, "Although Medicare has helped make health care more affordable for people with Medicare, many beneficiaries face high out-of-pocket costs for care they receive, including costs for services that are not covered by Medicare—in particular, long-term care services."
They contended that addressing Medicare coverage gaps and implementing a cap on beneficiaries' annual out-of-pocket costs "would help to alleviate the financial burden of health care for people with Medicare, although doing so would also increase federal spending and taxes" (Owens, "Vitals," Axios, 11/5; Alonso-Zaldivar, Associated Press, 11/4; Harvard T.H. Chan School of Public Health release, 11/4; Norton, HealthDay, 11/4; KFF issue brief, 11/4).