AARP’s Public Policy Institute Releases Report on Medicare Beneficiaries’ Out-of-Pocket Expenses
January 13, 2014 03:39 PM
The AARP recently released a report entitled, “Medicare Beneficiaries’ Out-of-Pocket Spending for Health Care.” The report found that Medicare beneficiaries spent a median of $3,324 a year of their own money on health care in 2010. Addiotionally, more than five million Americans spent more than $8,000 a year on out-of-pocket expenses. The burden of out-of-pocket expenses was found to be greatest for the sickest and oldest beneficiaries.
These findings support NAHC’s long-held argument that additional cuts to Medicare and the inclusion of additional copayments – such as for home health episodes of care for beneficies – would limit access and hurt the poorest and sickest Americans.
AARP’s analysis found that:
“Medicare beneficiaries spent a median of $3,324 a year of their own money on health care in 2010. Ten percent of beneficiaries—almost 5 million people—spent more than $8,030. Half of all Medicare beneficiaries spent at least 16.4 percent of their income on health care. The burden of health care costs was particularly heavy for the sickest and oldest beneficiaries as well as for near-poor beneficiaries…
Policy makers should be cognizant of these high OOP burdens when considering changes to improve the Medicare program.”
The AARP’s findings are similar to the arguments NAHC has consistently made opposing additional out-of-pocket spending for Medicare beneificiaries. With respect to home care in particular, NAHC has long-argued that the imposition of a home health copayment would essentially be a “sick tax” on the most vunlnerable Americans.
In its Legislative Priorities document, NAHC states that:
Copayments are an inefficient and regressive “sick tax” that would fall most heavily on the most vulnerable—the oldest, sickest, and poorest Medicare beneficiaries. About 86 percent of home health users are age 65 or older, 63 percent 75 or older, and nearly 30 percent 85 or older. Sixty-three percent are women. Home health users are poorer on average than the Medicare population as a whole. Home health users have more limitations in one or more activities of daily living than beneficiaries in general. The Commonwealth Fund cautioned that “cost-sharing proposals, such as a copayment on Medicare home health services, could leave vulnerable beneficiaries at risk and place an inordinate burden on those who already face very high out-of-pocket costs.”
Most people with Medicare cannot afford to pay more. In 2010, half of Medicare beneficiaries—about 25 million seniors and people with disabilities—lived on incomes below $22,000, just under 200 percent of the federal poverty level. Medicare households already spend on average 15 percent of their income on health care costs, three times as much as the non-Medicare population.
To read the full AARP report, please click here.
To read NAHC’s full home health copayment issue brief, please click here.
NAHC urges all of its members to attend this year’s March on Washington March 23 – 26 to further make the case opposing additional Medicare payment cuts or copayments directly to lawmakers.