Medicare’s Rising Costs Will Affect Most ‘Vulnerable’
Out-of-pocket health care costs for Medicare beneficiaries will rise substantially faster than the incomes of elderly Americans over the next quarter-century, according to a new Urban Institute report released yesterday. The AP/Dallas Morning News reports that the study, funded by the Commonwealth Fund, also finds that "those who are poorer, sicker and older will disproportionately absorb the rising costs"(AP/Dallas Morning News, 1/3). Here are some of the report's findings and projections:
- Out-of-pocket health care costs "for services not covered by Medicare" (which can include prescription drug costs, premiums and medical services) averaged $3,142 in 2000. However, by 2025 that figure will reach $5,248 in 2000 dollars.
- Average out-of-pocket costs for "older low-income women" in poor health will increase from $5,969 to $9,378 in that same period.
- By 2025, all Americans over 65 will spend 29.9% of their incomes on out-of-pocket health care costs, a roughly 10% increase from 2000. "Older low-income women in poor health" are projected to spend 71.8% of their income on health care.
- Between 2000 and 2025, the Medicare population will increase from 40 million to 70 million, necessitating that the program "deal with escalating health costs."
Study co-author Marilyn Moon said, "Beneficiaries are often left out of the equation when proposals to change Medicare are considered. These findings suggest that shifting even more expenditures to beneficiaries should not be the total solution to the problem generated by the increase in overall health care spending." Commonwealth Fund President Karen Davis added, "These projections sound a clear warning about the ability of Medicare to keep its promise of protecting elderly Americans from impoverishment. If we do not address cost burdens and the adequacy of benefits, many beneficiaries -- especially those with multiple chronic conditions and those with low incomes -- will be forced to make choices between basic necessities such as food and housing, and health care" (Commonwealth Fund release, 1/2). To read the full report, titled "Growth in Medicare and Out-Of-Pocket Spending: Impact on Vulnerable Beneficiaries," go to http://urban.org/health/growth-in-medicare.html.
This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.