Medicare Statistics:
The Medicare Population          

A. Demographics

Enacted in 1965, the Medicare program immediately covered 19.1 million people when it went into operation on July 1, 1966. Before 1966, only about half of all older Americans had health insurance. In 1972, Congress extended eligibility for Medicare to permanently disabled people who have received Social Security Disability Insurance (SSDI) payments for two years and individuals with end-stage renal disease (ESRD). (Kaiser,Medicare Chart Book (2001), p.3)

1. Number of Enrollees

a. Population covered by Medicare
• In 2003, Medicare covers 35 million Medicare enrollees ages 65 and over, and six million enrollees under age 65 with disabilities. These 41 million Americans comprise 14% of the U.S. population. (Kaiser: Medicare at a Glance)

• Breakdown by age and gender,1999:

  
  
  (Kaiser, Medicare Chart Book (2001), p.4)

• Medicare covers 98% of Americans 65 and older. (AARP Public Policy Institute, The Medicare Program (August 2001))

b. Past and future growth
• Since its implementation in 1966, the number of people with Medicare has more than doubled, with 39.6 million receiving Medicare in 2000, and is projected to double again by 2030, with an estimated 77 million receiving Medicare. (Kaiser, Medicare Chart Book (2001), p. 3)

c. Growth by age
• While one in eight Americans is currently over 65, it is projected that by 2030, the proportion will increase to one in five. (MedPac, p. 8)

• People aged 85 and older are the fastest growing group of people with Medicare. Between 1990 and 1996, the population growth of people age 85 and over averaged 3.4% a year, compared with 1.1% a year for people ages 65-84. (Kaiser, Medicare Chart Book (2001), p. 4)

d. Under-65 disabled
• In 2003, the under-65 disabled and ESRD made up about 14.6% of the Medicare population, or 6 million Americans. This population is more likely than adults over 65 to report being in poor health and have low incomes. (Kaiser, Medicare Chart Book (2001), p. 2-3,11)

2. Gender

a. Breakdown by gender:
• Women make up 57% of the Medicare population, while men make up 43% of the Medicare population.

  
  (Kaiser, Medicare Chart Book (2001), p. 4)

b. Gender disparities:

• Compared to men, older women are three times more likely to be widowed. (Kaiser, Medicare Chart Book (2001), p. 4)

• Older women receiving Medicare have lower incomes than do older men. In 1999, the mean income for men over 65 was $29,171, while women of the same age made only $15,615. (Kaiser, MedicareChart Book (2001), p. 9)

c. Spotlight on Women

• Twenty two million adult women (20%) rely on Medicare for basic health insurance protection. Women comprise 57% of the Medicare population (Kaiser, Stats on Women and Medicare (7/26/03))

• 77% of elderly Medicare-Medicaid enrollees are women; of those age 85 and older, 84% are women. (The Commonwealth Fund, 12/29/00)

3. Ethnicity

a. Entire Medicare population
• In 1999, of the entire Medicare population, 81.2% were White, 9% were Black, and 7.3% were Hispanic. (Kaiser, Medicare Chart Book (2001), p. 81)

b. Under-65
• Among those who were eligible for Medicare by disability in 1999, 69.6% were White, 17.3% were Black, and 10.9% were Hispanic. (Kaiser, Medicare Chart Book (2001), p. 81)

4. Income

a. Family income

• A quarter of all people with Medicare had family incomes between $10,000 and $19,999 in 2000: (Kaiser, Medicare Chart Book (2001), p. 9)

• In 2002, 6.6 million people with Medicare had incomes which fell below the poverty level. Of these, 85% had less than $12,000 in assets. (Kaiser, Medicare Beneficiaries and Their Assets (June 2002))

• In 2001, 44% of retirees said Social Security was their primary source of income, up from 38% in 2000. (Employee Benefit Research Institute, 5/17/02)

• Nearly half of people over 50 who file for bankruptcy say that they filed because of a medical reason. (Consumer Bankruptcy Project, Harvard University, Bankruptcy and Older Americans (5/3/02))

• In 2002, the elderly spent on average $3,757 - or 22.3% of their income - out-of-pocket for Medicare and health care services. (Maxwell, S., Moon, M. and M. Storeygard. CMWF: Modernizing Medicare Cost-Sharing (November 2002))

• The most recent data indicates that in 1998 approximately only half of people eligible for a Medicare Savings Program - a program that helps people with low incomes pay their Medicare premiums, deductibles and coinsurance - were enrolled. (The Kaiser Commission on Medicaid and the Uninsured, Medicare and Medicaid for the Elderly and Disabled Poor (1999))

• Only 48% of people who meet the Medicare Savings Programs' income eligibility limits also meet the very low asset limit of $4,000 for an individual and $6,000 for a couple. (Summer, L., and R. Friedland. The Commonwealth Fund, The Role of the Asset Test in Targeting Benefits for Medicare Savings Programs (November 2002))

• According to the Centers for Medicare and Medicaid Services, in December 2003, there were just under 3.5 million people - out of an estimated 7 million eligible - enrolled in the QMB (Qualified Medicare Beneficiary), SLMB (Specified Low Income Medicare Beneficiary) and QI-1(Qualified Individual-1) programs. (CMS, 12/03)

b. Income declines with age
• In 1999, the median per capita income of older Americans declined from $30,194 (among those ages 65-69) to $17,287 (among those over age 85). (Kaiser,Medicare Chart Book (2001) p. 9)<

c. Poverty among the under-65
• In 1999, among the people with Medicare under 65, 59 percent had incomes below 200 percent of the poverty level. (The Federal poverty level in 1999 was $8,240 for an individual and $11,060 for a couple.) (Kaiser,Medicare Chart Book (2001) p. 11)

d. Income and health
• Lower-income men and women with Medicare are generally in poorer health than those with higher incomes. 41 percent of those living under the poverty level describe their health as poor or fair, while only 22 percent of those with incomes above twice the poverty level do so. (Kaiser, p. 7)

• A typical person with Medicare has an annual income of $14,300 and at least two chronic health conditions. (Moon/Maxwell. The Urban Institute, Reforming Medicare's Benefit Package (May 2001))

• Men and women living below the poverty level were more than twice as likely to have both cognitive and physical difficulties than those with incomes of more than four times the poverty level (13% vs. 5%), 1997. (Moon & Storeygard (2001), p. 3)

f. Gender disparity
• Older women receiving Medicare have lower incomes than do older men. In 1999, the median income for men over 65 was $29,171, while women of the same age made only $15,615. (Kaiser, p. 9)

5. Physical and Mental Health

a. Health Status
• Among those who are eligible for Medicare only by age, 5.7% report poor health, 32.3% report good health, and 16.2% report excellent health. However, among those who are eligible for Medicare by disability, 27.3% report poor health, 25.2% report good health, and 4.8% report excellent health. (Kaiser, Medicare Chart Book (2001), p. 82)

b. Chronic conditions and the Medicare population
• Currently, 78% of the Medicare population suffer from one or more chronic conditions that require ongoing medical management. (Gottlich. Partnership for Solutions, Medical Necessity Determination in the Medicare Program (January 2003))

• Among those with Medicare, 65.4% have two or more chronic conditions. (Kaiser, Medicare Chart Book (2001) p. 83)

• 20% of the older adult population and 14% of the younger population with disabilities have at least five chronic conditions. (Blumenthal, D. and J. Eichner, eds. Medicare in the 21st Century: Building a Better Chronic Care System (January 2003))

• More than 40% of those with chronic illnesses are functionally illiterate. Many of these people have Medicare because of disability.

c. Cancer and the Medicare population
• In 1999, 20% of the Medicare population under age 65 and 14% of people over 65 had cancer. (Kaiser, Medicare Chart Book (2001), p.8)

d. Diabetes and the Medicare population
• In 1999, among those who were eligible for Medicare by age, 17% had diabetes. Among those who were eligible by disability, 20% had diabetes. (Kaiser, Medicare Chart Book (2001), p.8)

• Diabetes remains undiagnosed in approximately 33% of all older Americans. (Diabetes Care 11/30/01)

e. Cognitive/mental impairments in the Medicare population
• Among those who are eligible for Medicare by age, 18.8% have some type of cognitive or mental impairment. Among those with a disability, 51.4% suffer from cognitive or mental impairments. (Kaiser, Medicare Chart Book (2001), p.83)

• In 1999, over 20% of those who became eligible for Medicare as a result of a disability qualified because of a mental disorder or mental retardation. (Kaiser, The Faces of Medicare: Medicare and the Under-65 Disabled (July 1999))

• 20% of older adults and over 50% of younger people with disabilities have a mental condition. (Kaiser, The Faces of Medicare: Medicare and the Under-65 Disabled (July 1999))

• Approximately 8.4% of older people have Alzheimer's disease or other forms of dementia. (National Academy of Social Insurance, Chronic Care)

• More than 25% of older people and over 50% of younger people with disabilities with Medicare have a functional impairment. (National Academy of Social Insurance, Chronic Care)

f. Correlations between income and health status
• Lower-income men and women with Medicare are generally in poorer health than those with higher incomes. 41 percent of those living under the poverty level describe their health as poor or fair, while only 22 percent of those with incomes above twice the poverty level do so. (Kaiser, p.9 )

• Men and women living below the poverty level were more than twice as likely to have both cognitive and physical difficulties than those with incomes of more than four times the poverty level (13% vs. 5%), 1997. (Moon & Storeygard (2001), p. 3)

h. Original Medicare v. Medicare private plans

Percentage of beneficiaries with health condition by HMO status, 1997
(Moon & Storeygard (2001), p. 6)


• The Centers for Medicare and Medicaid Services has estimated that private plans enroll people that are,on average, 16.3 percent less costly than people in the traditional Medicare program. (CMS, 2003)
  

6. Health literacy

a. Low health literacy in the Medicare population
• One-third of men and women with Medicare are unable to properly understand basic health-care materials. 70% of those over 85 have low health literacy. (Dr. Parker, DC Conference, 2002)

• Fifty percent of welfare recipients read below fifth-grade level. (Center for Health Care Strategies, Who has health literacy problems? (2003 rev. ed.))

• Two-thirds of 58 patients who admitted to having reading difficulties had never told their spouse; nine had told no one. (Center for Health Care Strategies, Who has health literacy problems? (2003 rev. ed.))

• Low health literacy directly costs the US about $73 billion a year in longer hospital stays and more frequent visits to the doctor. (National Academy on an Aging Society, 12/13)

b. Health literacy is essential for obtaining proper care
• There is a 52% increase in the risk of hospitalizations for those with low literacy compared to those who have adequate literacy. (Dr. Parker, DC Conference, 2002)

B. Use of and Access to Services

1. Use of services

a. Where do Medicare expenditures go?

• Use of services by people with Medicare, 2002: (MedPac, p. 38)


b. Mental health under original Medicare
• The likelihood of people receiving needed mental health services was significantly lower if they had Medicare than if they had employer-based coverage or Medicaid. (MedPac, p. 13)

c. Use of home health services
• The 8% of people with Medicare who used home health services in 1998 received 51 visits on average. (Kaiser, p. 21-22)

d. Use of Parts A and B
• In 2001, 22 percent of all people with Medicare used Part A services, while 87 percent used Part B services. (Kaiser, p. 21)

e. Distribution of Expenditures
• According to a 2003 analysis by the Congressional Budget Office, between 1995 and 1999, on average, the costliest five percent of people with Medicare accounted for 47 percent of annual Medicare (fee-for-service) spending and the costliest 20 percent accounted for 84 percent. By contrast, the least costly 40 percent of people with Medicare accounted for only one percent of Medicare spending. (CBO, 2003)

2. Access to care

a. Access to Care, 1999
(MedPac, p. 13)

b. Access to mental health services
• A 1999 analysis showed that of those individuals with Medicare over 65 who needed mental health services, 63 percent did not receive them. The likelihood of their receiving such services was significantly lower if they had Medicare than if they had employer insurance or Medicaid. (MedPac, p. 13)

c. Medicare Savings Programs
• The most recent data indicates that in 1998 approximately only half of people eligible for a Medicare Savings Program - a program that helps people with low incomes pay their Medicare premiums, deductibles and coinsurance - were enrolled. (The Kaiser Commission on Medicaid and the Uninsured, Medicare and Medicaid for the Elderly and Disabled Poor (1999))

• Only 48% of people who meet the Medicare Savings Programs' income eligibility limits also meet the very low asset limit of $4,000 for an individual and $6,000 for a couple. (Summer, L. and R. Friedland. The Commonwealth Fund, The Role of the Asset Test in Targeting Benefits for Medicare Savings Programs (November 2002))

• According to the Centers for Medicare and Medicaid Services, in December 2003, there were just under 3.5 million people - out of an estimated 7 million eligible - enrolled in the QMB (Qualified Medicare Beneficiary), SLMB (Specified Low Income Medicare Beneficiary) and QI-1(Qualified Individual-1) programs. (CMS, 12/03)

3. Inadequate health care coverage

a. Consequences of going without
• Those without supplemental coverage tend to use fewer clinically necessary preventive services: 91.7 percent of men and women with Medicare who have some form of supplemental coverage use necessary preventive services every year, while only 72.8 percent of those without coverage use these annual services. (MedPac, p. 32)

b. Under-65 disabled lack coverage
• While 10 percent of over-65 Medicare recipients lacked supplemental insurance in 1999, 28 percent of under-65 disabled went without. (Kaiser, p. 21)

c. Expenses due to lack of drug coverage
• Even though people with Medicare without drug coverage filled fewer prescriptions than those with drug coverage (17 prescriptions compared to 24), they spent more out-of-pocket on prescription drugs in 1998. (Kaiser, p. 61, 65)

C. Expenses Medicare Does Not Cover

1. Out-of-pocket expenses

a. Rising Costs
• Out-of-pocket spending increased from $1,921 per capita in 1993 to $2,296 in 1999 (adjusted for inflation). (MedPac, p. 18)

• In 2002, the elderly spent on average $3,757 - or 22.3% of their income - out-of-pocket for Medicare and health care services. (Maxwell, S., Moon, M. and M. Storeygard. The Commonwealth Fund, Modernizing Medicare Cost-Sharing (November 2002))

• Average annual per capita drug spending for the Medicare population is rising at a rate of 12% per year. Out-of-pocket drug expenses for people with Medicare increased from $644 in 2000 to $996 in 2003. (Kaiser: Medicare and Prescription Drugs)

• Older Americans with Medicare pay 15% more for prescriptions than many patients in insurance programs. (DHHS, 4/21/00)

• In 2000, Medicare enrollees with disabilities in the 45-64 age bracket averaged annual out-of-pocket expenses of $3,837 per person, while the elderly in poor health without supplemental coverage averaged $4,478 per person, and low-income women over age 85 in poor health averaged $5,969 per person. (Maxwell, M., Moon, M. and M. Segal. The Commonwealth Fund, Growth in Medicare and Out-of-Pocket Spending (January 2001))


b. Out-of-pocket expenses breakdown, 1999

• Prescription drugs made up 17% of the out-of-pocket expenses for people with Medicare age 65 and over:
(AARP, p. 6-67)


c. Out-of-pocket spending by age and health status, 1999
(Kaiser, p. 46)

d. Pushed below the poverty level
• 11 percent of people with incomes above poverty level have enough out-of-pocket costs to push them below the poverty line. (MedPac, p. 18)

e. Out-of-pocket expenses in Medicare HMOs
• The estimated annual average out-of-pocket spending for people in Medicare+Choice plans increased from $976 in 1999 to $1,964 in 2003. (Mathematica, 12/2003)

2. Costs of long-term care

a. Long-term care
• In 2001, the average annual cost of nursing home care was $56,000. There is no Medicare coverage for long-term care past 100 days in a skilled nursing facility. (AARP, p. 6-68)

3. Prescription costs

a. Need for prescription drugs


• 32% of seniors in the U.S. report poor prescription drug coverage, compared to 10% in Canada and 1% in Great Britain. (Comonwealth Fund, 8/11/00)

• In 2001, 10 percent of Medicare beneficiaries were responsible for 39 percent of all drug expenditures in the Medicare population, while 49 percent of beneficiaries had no drug expenses or expenses less than $1,000. (Kaiser, Medicare Chart Book (2001), p.68)

• In 1999, 4.5 million people with Medicare paid more than $1,000 a year on prescription drugs and 1.3 million paid more than $2,000. (National Academy of Social Insurance, Chronic Care (4/99))

• Older Americans account for 34% of all prescriptions dispensed and 42 cents of every dollar spent on prescription drugs. (Families USA, Cost Overdose: Growth in Drug Spending for the Elderly 1992-2010 (July 2000))

• People under age 65 with a disability are prescribed an average 40% more prescriptions than people with Medicare over age 65. (The White House National Economic Council/Domestic Policy Council, Disability, Medicare and Prescription Drugs (July 2000))

• Psychotherapeutics, used to treat mental impairments, are the most common class of drug taken by people with disabilities (57% of this group use these drugs), but they only rank 10th among the drugs taken by the elderly (23%). (Briesacher, B. et al. The Commonwealth Fund and Kaiser Family Foundation, Medicare's Disabled Beneficiaries: The Forgotten Population in the Debate Over Drug Benefits (September 2002))

b. Sources of drug coverage for individuals with Medicare, 1998
(Kaiser, Medicare Chart Book (2001), p. 59)

• 33% of Medicare beneficiares, or 13 million people, have no prescription drug coverage. (CMS, 11/16/01)

c. Sources of prescription drugs for under-65 disabled

• Medicaid was the most common source of additional coverage for the disabled (32.1%), while employer-sponsored coverage and Medigaps were the leading sources of additional coverage for people over 65. (MedPac (June 2003), p. 34)

d. Prescription drugs under Medigap
• In 1999, more than 90 percent of Medigap enrollees were in Medigap plans that did not offer prescription drug coverage. (Kaiser, p. 41)

e. Limited drug coverage in Medicare HMOs

• The share of Medicare+Choice enrollees in plans with any drug coverage declined from 84% in 1999 to 72% in 2002. (Kaiser: Medicare+Choice)

• In 2000, 10% of Medicare HMOs dropped prescription coverage and 21% reduced their annual spending limits. (Mathematica Policy Research, Inc., (6/7/01))

• In a 2001 study of 69 market areas, only 16 of the 256 basic benefit packages offered an unlimited prescription drug benefit. (Mathematica, p. 31)

• The proportion of basic benefit packages offering drug coverage declined from 88% to 63% between 1999 and 2001 across the 69 study markets. (Mathematica, p. 31)

• Almost one-third of benefit packages offering prescription drug coverage had an annual cap of $500 or less. (Mathematica, p. 50-51)

f. Rising Costs of Prescriptions

• Average annual per capita drug spending for the Medicare population is rising at a rate of 12% per year. Out-of-pocket drug expenses for people with Medicare increased from $644 in 2000 to $996 in 2003. (Kaiser: Medicare and Prescription Drugs)

• Older Americans with Medicare pay 15% more for prescriptions than many patients in insurance programs. (DHHS, 4/21/00)

• Consumer spending on prescription drugs has been rising by 17% or more a year since 1998. (National Institute for Health Management 4/19/02)

• As people age, they tend to spend a larger part of their income on prescription drugs. In 1997, those aged 65-74 spent 3.4 percent of their income on drugs, while those over 85 spent 7.7 percent of their income on prescriptions. (Kaiser, Medicare Chart Book (2001), p. 67)

g. Expenses for drugs Medicare does not cover

• Average out-of-pocket spending on prescriptions, 1998
  (Kaiser, Medicare Chart Book (2001), p. 65)

• Average number of prescriptions filled annually by people with Medicare, with and without coverage, 1998
  (Kaiser, Medicare Chart Book (2001), p. 65)

  The above graphs illustrate that even though people without drug coverage fill fewer prescriptions, they spend more out-of-pocket on prescription drugs.
  


h. Missed doses
• In 1999, 1.2 million people with Medicare did not fill a prescription written for them for financial reasons. (AARP, 6/14/02)

• High drug costs caused 44% of older rural adults to take less medicine than prescribed by their doctors. (The Gerontologists 11/2/01)

• In 2001, one fourth of seniors in eight study states either skipped doses or did not fill a prescription due to cost, while one fifth of respondents reported spending less on food, health or other necessities so they could afford to purchase their medications. (Kaiser and Commonwealth Fund, July 2002)

i. Drug Industry Profits

• The prices of half of the 50 prescription drugs most used by older Americans increased at two or more times the rate of inflation from 1999 to 2000. (National Academy of Social Insurance, Chronic Care (04/99))

• In 2001, the U.S. drug industry was ranked first in profits as a percentage of revenue - 18.5% (Fortune Magazine, April 2002)

  
  (Fortune Magazine, April 2002)

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