Average out-of-pocket cost for Medicare beneficiaries are expected to keep rising over the next decade when it will reach half of a senior's income.
The Kaiser Family Foundation estimated that out-of-pocket costs will increase from 41% of average per capita Social Security income in 2013 to 50% by 2030.
In its analysis of 2013 numbers, KFF said women paid 44% of their per capita income on out-of-pocket costs, which was more than men, who paid 38% on out-of-pocket costs. That’s expected to increase to 52% and 47% respectively by 2030.
KFF found that out-of-pocket healthcare costs rise as seniors age, especially for people 85 and over. The costs are higher for women, people in poor health and lower-income Americans.
Researchers found that half of Medicare beneficiaries in traditional Medicare spent at least 14% of their per capita income on out-of-pocket healthcare costs in 2013. The figure is much higher for people 85 and over, who spent 74% of their per capita income on out-of-pocket costs.
KFF said 36% of beneficiaries in traditional Medicare and half of people with incomes below $20,000, spent at least 20% of their per capita income on out-of-pocket costs in 2013. KFF predicted that percentage will increase to 42% of traditional Medicare beneficiaries by 2013.
Premiums, deductibles and other out-of-pocket costs are rising in all health plans, both private payers and public programs. In an October report, KFF found out-of-pocket costs are outpacing wage growth in employer-based plans.
Shifting more healthcare costs onto individuals could put personal finances in peril, especially those living on Social Security. High out-of-pocket costs can also affect a patients’ healthcare if they delay or avoid healthcare because they can’t afford it. That leads to sicker patients and higher healthcare costs in the long run.
This scenario is far from ideal, especially for value-based payment programs that incentivize providers and hospitals for better outcomes and keeping down costs. Older, sicker patients not able to afford care could present barriers for providers looking to maximize incentives in value-based programs.
Report co-author Juliette Cubanski suggested policy changes that could help reduce the increasing financial burden on seniors.
Changes could be made to #Medicare to help reduce the high spending burden some people might face, such as adding an annual out-of-pocket spending limit to protect against high out of pocket costs for people who need a lot of medical care— Juliette Cubanski (@jcubanski) January 29, 2018