Through Richard Eisenberg, Next avenue Editor
Some people don’t think high health care costs are a problem for Americans 65 and older because Medicare pays for all of their medical bills. But a revealing new report from the Commonwealth Fund, a nonprofit health care think tank, shows just how wrong that assumption is.
In fact, Americans 65 and over were more likely to postpone or forgo health care in the past year because of the cost that people their age in 10 other high-income countries, according to the Commonwealth Fund survey.
In addition, the survey of 18,477 adults found that 20% of Americans 65 and over had chargeable health care costs of more than $ 2,000 last year. This is higher than in nine of the 10 countries (the outlier: Switzerland, at 34%). In France, Germany, the Netherlands, Norway, Sweden and the UK, only 4-5% have done so.
Unaffordable health care for people 65 and over
“Americans 65 and over often simply cannot afford the care and they are not getting the care they cannot afford,” Gretchen Jacobson, Commonwealth Fund Vice President, told me. , Medicare.
Jacobson noted that the average Medicare beneficiary earns about $ 30,000 per year. âSo when you talk about two thousand dollars or more out of pocket, that’s a significant amount of money,â she said. That $ 2,000 tab equals about 7% of their income.
And these huge health care expenses can also hurt Americans’ retirement security. According to financial services firm Fidelity, an average 65-year-old couple might need about $ 300,000 in savings for health care costs in retirement.
The Commonwealth Fund report follows on from another he published about which I recently wrote in “Older Americans face financial criticism during Covid-19 period“It also revealed that Americans 65 and over fare worse than others their age in 10 wealthy countries.
So what causes financial stress for Medicare beneficiaries?
It is a combination of three things, mainly: types of Medicare care does not blanket; the 20% of the bills beneficiaries have to pay (euphemistically called cost-sharing) for Medicare Part B expenses such as doctor visits, mental health and preventative care, and the cost of annual Medicare deductibles (this that beneficiaries pay out of pocket before coverage starts) and premiums.
Unlike many other countries studied by the Commonwealth Fund, the US medicare system generally does not pay for long-term care. It also generally does not cover dental, vision or hearing costs which, according to a recent report by the Kaiser Family Foundation, “can run into the hundreds or even thousands of dollars for expensive dental treatments, hearing aids or corrective glasses.” . (Medicare Advantage plans from private insurers, the alternative to Original Medicare, often cover dental, vision, and hearing expenses, although you typically need to consult with health care providers in their networks.)
âIt appears that other countries are providing more comprehensive care for the elderly in their health care,â Jacobson said.
What Medicare Does Not Cover
Only about a quarter of retirees can cover serious long-term care needs for at least five years and about another quarter cannot afford even minimal long-term care needs, according to a recent report from the Center for Retirement Research. from Boston College. Only 5% of black and Hispanic retirees have the capacity to meet the significant costs of long-term care, this study also noted.
Medicare coverage gaps are significant: 44% of Medicare beneficiaries have difficulty hearing and 35% have difficulty seeing, according to the Kaiser Family Foundation.
According to the Institute for Healthcare Policy & Innovation at the University of Michigan, only 53% of Americans between the ages of 65 and 80 have dental coverage (often through employers, spousal employers, or Medicare Advantage plans) .
And more than one of six older Americans skipped a dental visit last year because of the cost, the Commonwealth Fund has found. In contrast, only 1-2% of older people in Germany and the Netherlands have done so.
“In countries that provide more generous dental care, it is not too surprising that only a small percentage of people ignore necessary dental care,” said Jacobson.
Dr Domenica Sweier, a professor at the University of Michigan School of Dentistry who helped develop the National Poll on Health Aging dental study, said: Barriers to dental care in people elderly.
President Joe Biden’s Build Back Better plan, currently being debated in Congress, would add dental, vision and hearing coverage to Medicare. It would be the biggest expansion of Medicare benefits in 15 years and cost about $ 358 billion over 10 years.
But some lawmakers and analysts believe the expense would be too high for the federal government, especially since the Medicare Hospital Insurance Trust Fund is expected to become insolvent in 2026, according to its trustees.
âIt’s a constant balance, I think, between affordability for recipients and affordability for the federal government,â Jacobson said. “It’s a long-standing struggle, since the creation of Medicare [in 1965]. “
The high costs of postponing healthcare
But, she adds, “the question is, what are the implications on the road of delayed care, delayed diagnoses and worse health outcomes.”
Studies have repeatedly determined that postponing or forgoing medical and dental care can lead to worsening physical health problems and mental health problems. Washington Post opinion columnist Helaine Olen recently noted that people with gum disease, for example, have a higher risk of heart attacks and strokes than others.
âWe know that delayed care can lead to delayed diagnoses, which can lead to poor health outcomes and also increased health care costs over time,â Jacobson said. “So what’s delayed today can really have big implications in the future.”
Then there are the rising costs of Medicare premiums and deductibles that eat into beneficiaries’ wallets.
The 2022 annual premium for Medicare Part B is expected to be around $ 1,900, which would represent an increase of almost 7% over 2021. For Medicare Part D (prescription drugs), it is expected to be close to $ 400, an increase of about 5%.
The 2022 annual deductible for Medicare Part A (hospitalization) will be approximately $ 1,400, the Part D deductible is expected to be approximately $ 485, and the Part B deductible will be approximately $ 217. Medicare beneficiaries will also likely have to pay $ 7,050 in prescription drug expenses in 2022 before the program’s catastrophic drug coverage takes effect.
Medicare is clearly a big help for many Americans 65 and over. Even so, Jacobson said of Medicare beneficiaries: “It’s amazing how many people end up skipping needed health care because they can’t afford it.”