The Commonwealth Fund released a report this week examining out-of-pocket expenses for people with Medicare. Fifty-six million people—17% of the U.S. population— rely on Medicare and receive many benefits from the program, yet, Original Medicare excludes coverage for dental, vision, hearing, and long-term services, and contains no ceiling on out-of-pocket costs for covered services. As a result, beneficiaries can be exposed to high costs.
The report examines out-of-pocket costs by individual income and health status. It finds that more than one in four people with Medicare —15 million people—spend 20% or more of their incomes on premiums and medical care. This includes cost-sharing and spending on uncovered services, which Commonwealth Fund defines as being “underinsured.”
The estimated 25 million people with Medicare who have incomes below 200% of the Federal Poverty Level (FPL)—just under $24,000 for a single person—and those with multiple chronic conditions or functional limitations are at significant financial risk. Having a low income and complex health conditions often go together: 68% of beneficiaries with incomes below 200% of the FPL have three or more chronic conditions and/or functional limitations. Among those with low income and poor health, 42% spent 20% or more of their incomes on premiums and care and 39% would be considered underinsured based on medical care cost-sharing alone.
The report concludes that with the current financial burden and impact on access to care, there is a need for caution when assessing Medicare reform proposals. Any changes to Medicare benefits and cost-sharing should, the authors reason, aim to ensure affordability and provide relief for people with low-incomes.
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