Posts Tagged "Medicaid"

Middle Class Gets the Most from Medicare

width=This is a fact of retirement life: older Americans haven’t paid as much into Medicare and Medicaid as government spends on their healthcare and nursing home stays.

But it is middle-class retirees who get the most out of the system, according to a new study.

Middle-income households receive about $230,000 to $260,000 more in Medicare and Medicaid benefits, on average, during their retirement years than the total amount they’ve paid in. Their contributions consist of the Medicare payroll and income taxes deducted from workers’ paychecks, the portion of their federal and state income taxes devoted to Medicare and Medicaid, and the Medicare Part B and D premiums they are paying in retirement.

The net benefit of the programs to the middle class dwarfs the $153,000 in average net benefits for retired households in the top fifth of the lifetime earnings distribution, and it also exceeds the $196,000 gain for the bottom fifth.

The middle class is defined as the second, third, and fourth of the five earnings groups the researchers analyzed in this study. The annual data used to calculate the health spending and payment estimates for this analysis are adjusted for inflation.

width=Americans over 65 receive a third of all the medical care provided in this country. This new research, funded by the U.S. Social Security Administration, uses government administrative data to compare the benefits of Medicare and its smaller companion program, Medicaid, for each earnings group.

There are two reasons the middle class gets the most from the system. First, although the top earners live the longest and receive the most medical care, the middle class lives almost as long and ends up receiving a significant amount of care. …Learn More

Traditional Medicare or an Advantage Plan?

Medicare Advantage or traditional Medicare with supplemental insurance: which should you choose?

A compelling reason so many 65-year-olds are flocking to Medicare Advantage insurance policies is that they tend to have significantly lower premiums than enrolling directly in traditional Medicare. Retirees are also inundated with advertisements on television, online and in the mail urging them to sign up for the Advantage plans, which sometimes cover vision and dental care.

But the premium alone is a superficial test for such a consequential decision. Traditional Medicare plans combined with a Medigap or Part D drug plan might, in the end, be less costly. Differences in the quality of care and the out-of-pocket costs can weigh more heavily over the long haul as retirees get older and their health declines.

The federal government spent $321 more per person in 2019 on Medicare benefits in Advantage plans than on each person enrolled directly in traditional Medicare, according to Kaiser. “The growing role of Medicare Advantage and the relatively high spending on this program raise the question of how well private plans serve their enrollees,” Kaiser said.

To shed light on the advantages and disadvantages of each route, Kaiser’s researchers combed through more than five dozen academic studies and packaged them into a report comparing the care provided under Medicare Advantage policies and traditional Medicare.

Kaiser, a healthcare non-profit, found that both choices had some important things in common, including similar levels of patient satisfaction with care, wait times, care coordination, and the ability to find a doctor or specialist.

Medicare Advantage plans are separate insurance policies, and the federal government pays the insurance company for some of the care. Traditional Medicare in this report covers people who pay the federal Medicare premium for Part A and B coverage, and people who enroll in Medicare and also buy a Medigap supplement or Part D drug policy from an insurer.

A decision made at 65 isn’t irreversible. But most retirees tend to stay put once they choose between an Advantage insurance policy and traditional Medicare. It’s also important to remember that migrating from a Medicare Advantage policy to a Medigap supplement is more difficult than going from Medigap to Medicare Advantage.

Here’s a rundown of the most salient differences in cost and care in Kaiser’s summary. But this is a complicated decision, and many of the findings are subtle. So read the full report to understand the nuances. …Learn More

A Start on Estimating Retiree Medical Costs

New Medicare enrollees can expect their uncertain medical expenses to take roughly $67,000 out of the household budget, on average, over the rest of their lives.

Since this estimate is only an average, some retirees will pay less and some will pay much more. And the estimate, revealed in a new brief by Karolos Arapakis at the Center for Retirement Research and based on a larger study, includes only the copayments and cost-sharing charges paid by retired households over 65. It excludes their single largest medical expense – monthly insurance premiums.

The estimate is, nevertheless, a useful benchmark for older workers and retirees who want to get a better handle on their health care spending, which is very difficult to plan for. The study takes into account the unexpected cost of things like a broken arm, as well as the cost of managing chronic medical conditions, which accumulate over the years.

To estimate total medical costs, the researchers linked a periodic survey of retirees that includes out-of-pocket spending to their Medicare insurance records – for Parts A, B and D, and Medicaid  – and to a separate data source that tracks private insurance policies such as Medicare Advantage plans and other smaller public and private sources.

The various government and private insurers pay around 78 percent of older households’ total lifetime health care costs, excluding premiums, the researchers found. The retirees pay the remaining 22 percent, or about $67,300 for an older household with average spending for medical care.

However, retirees with the most serious medical problems will spend two times more out-of-pocket during their lives, and relatively healthy people will pay less. …Learn More

Good News on Health Insurance in Pandemic

To paraphrase a U.S. senator in 1977, the moral test of government is how it treats the sick, the poor, and its children. That rings especially true during an historic public health emergency like COVID.

Congress came through with financial relief to blunt the pandemic’s impact, and the money that flowed through the economy provided more Americans with health insurance, while also reducing poverty.

Several newly released U.S. Census reports “show how much vigorous policies can do to prevent poverty and preserve access to health care,” the Center on Budget and Policy Priorities concluded.

The Uninsured. During the pandemic, the share of all adults lacking health insurance declined from 9.2% in 2019 to 8.6% in 2021, reversing the trend of a rising uninsured rate in prior years. The rate dropped as Congress improved access and affordability during COVID by passing large premium reductions for policies purchased on the federal and state exchanges and by requiring states that receive Medicaid funds to expand their coverage of poor and low-income workers during the pandemic.

Congress has extended the premium reductions through 2025, but the federal enhancements to Medicaid are set to expire, leaving states to determine the extent to which they will cover their low-income workers in the future.

The Poor. The COVID aid passed by Congress lifted nearly 14 million Americans out of poverty over the past two years, according to Census. This statistic aligns with earlier research showing the financial assistance was particularly effective in helping low-income workers and people who were struggling financially prior to the pandemic. …Learn More

Limiting Medical Debt: a 50-State Ranking

Lawmakers in Maryland, California and Maine have made the most effort to prevent residents from drowning in medical debt. Texas, South Carolina and Tennessee do the least.

This is the assessment of an organization known as Innovation for Justice, a team of researchers at the University of Arizona and the University of Utah. They ranked the 50 states on whether they have taken myriad steps to minimize medical debt. These legislative measures range from restrictions on the healthcare industry’s billing and collection practices to how debt claims are handled in the courts.

Medical debt is the single largest category of consumer debt, and the Kaiser Family Foundation estimates that 100 million Americans are behind on paying their medical or dental expenses – and a quarter of them owe more then $5,000.

This project would be important at any time and is even more so during a pandemic when many people have incurred medical debt for COVID. Some of that debt is even for bills the federal government would’ve paid on behalf of the uninsured cashiers, drivers, retail workers, restaurant servers and cooks who were on the front lines in the worst days of the pandemic.

Putting the state rankings into a national perspective, the consumer protections to prevent the accumulation of debt are not exactly impressive. Only three of the 50 states qualify as having good protections. The researchers ranked another 27 states as weak and 20 as poor.

Compare Medical Debt Policies by US StatesMaryland, which sits at the top of the medical debt scorecard, satisfies most of the researchers’ criteria for debt reduction. State lawmakers have limited residents’ debt by mandating that patients be screened for health insurance or government health benefits. The state also regulates hospital billing practices, instructing them to offer a payment plan before sending a patient’s bill to collections and requiring that bills itemize every charge, every payment, and whether charity care has been provided to the patient.

Last but not least, Maryland expanded its Medicaid program, as encouraged by the Affordable Care Act, to extend subsidized or free health insurance to more of its low-income workers. Medical debt has been reduced in the states that expanded their coverage. The lowest-ranked states – Texas, South Carolina and Tennessee – are among the states that have not expanded Medicaid.

Visit the medical debt scorecard to see what your state is – or isn’t – doing. …Learn More

Use of Medicare Subsidy Low in Some States

A major government program helps poor and low-income retirees and adults with disabilities defray what can be substantial healthcare expenses that aren’t covered by Medicare. But enrollment is unusually low in some states because of more stringent eligibility standards.

The Medicare Savings Programs, which are administered by the states and funded by the federal government, subsidize Medicare’s Part A and Part B premiums and cost-sharing obligations for more than 10 million Medicare beneficiaries.

But participation varies widely from state to state, according to a new report by the Kaiser Family Foundation, due to a combination of differences in need and varying eligibility standards.


No more than 10 percent of the retirees in Nebraska, New Hampshire, North Dakota, Utah, and Wyoming are enrolled in their state programs. The enrollment rates are double or even triple that – from 20 percent to 26 percent – in Alabama, California, Connecticut, the District of Columbia, Louisiana, Maine, Massachusetts, and Mississippi.

A major reason for the disparities in enrollment is the difference in the dollar value of assets retirees in each state are permitted to have and still qualify. The federal government set the dollar values on the stocks, bonds, and other assets of Medicare beneficiaries at $8,400 for single and widowed retirees and $12,600 for couples in 2022. The house and one car do not count.

But several states have chosen to make it easier to qualify by setting asset limits that exceed these federal minimums. In fact, eight of the nine states and the District of Columbia that have the highest shares of retirees in their programs either set asset limits above the federal standard or don’t have an asset test at all.

These states still restrict participation to disadvantaged people by placing income caps on eligibility, which range from about $13,000 to $26,000 per year in all but one state. But in several states that only match the low federal minimums for assets, disadvantaged retirees aren’t getting the financial assistance they need to access medical care.

Meredith Freed, a senior Medicare policy analyst for Kaiser, said that between a third to half of retirees with incomes below 135 percent of the federal poverty limit nationwide are not enrolled.

Medicare beneficiaries spend an average $6,000 per year out of their own pockets for medical care. “Having help with premium and cost-sharing is incredibly important,” Freed said. …Learn More

NCOA Benefits Checkup

One-Stop Shopping for Retiree Financial Aid

Fewer than half of low-income retirees who are eligible for SNAP food stamps or don’t automatically receive a medication subsidy as part of their Medicaid coverage are taking advantage of the programs.

These are two prominent examples of the head-spinning number of assistance programs for people over 60, from state property tax breaks and veterans benefits to transportation and healthcare assistance.

“Most older adults are not receiving all the benefits they’re eligible for, and it’s most likely that they’re not aware of what benefits are available to them,” said Erin Kee McGovern, director of the Center for Benefits Access at the non-profit National Council on Aging (NCOA).

And when retirees have heard about a specific program, they often assume – mistakenly – that they won’t qualify, she said. Other barriers are the daunting array of different state programs and lengthy application forms, which can be 15 or 20 pages.

To simplify the search, the NCOA created the Benefits Check Up, an online tool that does the initial screening to figure out which federal and state programs are available to individuals based on whether they fit the eligibility criteria.

The Benefits Check Up has been around since 2001, and more than 1 million individuals and social service agencies use it every year. To get the word out about this tool, NCOA provides grants to food banks, senior centers, and 100 local senior services agencies. It’s important to reach as many retirees as possible who need help.

Retirees enter their zip code and just a few other details and click on the categories that interest them, such as veterans’ benefits, health care subsidies, or tax cuts. The website spits out the programs that people might qualify for based on their income and where they live.

If a program looks interesting, the retiree fills out NCOA’s lengthier screening application for that specific program. Eventually, an application will still have to be filed with the relevant government agency.

But the online screening tool streamlines the process and is a great place to start. So check it out.Learn More