Posts Tagged "medical care"

Healthcare’s Big Bite Out of Retiree Budgets

This year, retirees were jolted by the 14.5 percent hike in Medicare’s Part B premium for medical services. It was the second-largest percentage increase in at least 20 years.

The monthly premium, which rose to $170, will drop to $165 in 2023. But medical care is an expensive proposition that consumes a big chunk of many retirees’ income from Social Security, 401(k)s, and other sources.

According to a new analysis of 2018 health care data, typical retirees had 88 percent of their total income left to buy everything else after paying for medical care. And one in 10 retirees with inordinately large health care costs had 63 percent or less left over for living expenses, said Melissa McInerney, Matthew Rutledge, and Sara Ellen King in their study for the Center for Retirement Research.

Interestingly, Medicare does protect against the larger cost burdens that follow health declines. As retirees age or develop chronic physical or medical conditions, the researchers found, the share of income consumed by medical costs doesn’t change very much.

Medicare covers virtually all retirees, and the lion’s share of their out-of-pocket medical expenses are premiums – for Part B, Part D drug coverage, Medigap, or Medicare Advantage insurance plans. The other medical expenses included in this study were cost-sharing and copayments for basic Medicare, prescription drugs, eyeglasses, hearing aids, and visits to the doctor, dentist, and hospital. Long-term care costs were excluded.

The analysis was restricted to people who have signed up for both Medicare and Social Security.

Paying for care puts the most strain on low-income Americans, many of whom rely almost exclusively on Social Security and have few, if any, other income sources. The exception is people with such low incomes that they qualify for Medicaid; they pay only 4 percent of their income for health care. …Learn More

ACA Policyholders May Dodge a Bullet

It looks like some 13 million people who buy their health insurance on the state and federal exchanges may not see large hikes in their premiums next year after all.

The more generous premium subsidies for Affordable Care Act (ACA) policyholders approved in 2021 under the American Rescue Plan for COVID relief are set to expire at the end of this year. There have been months of uncertainty over whether Congress could pass a bill to continue the subsidies.

But The Washington Post reports that the House and Senate are on a path to agreeing to extend them for three more years, along with allowing Medicare to negotiate the prices of some prescription drugs.

Last year, the American Rescue Plan enhanced the ACA’s original subsidies by capping insurance premiums at 8.5 percent of a worker’s income for 2021 and 2022. If the caps are renewed, ACA policyholders would also avoid the “double whammy” of insurance companies’ 2023 premium hikes, which they have started submitting to their state insurance regulators.

The prospect of an agreement comes months after state insurance commissioners warned lawmakers that the uncertainty around whether the subsidies would continue meant that some insurers would raise 2023 premiums by more than they might have. ACA subsidies make health insurance more affordable to more people, which takes some pressure off of premiums by expanding the pool of customers and reducing insurers’ risk.

Two groups that historically have paid more for health insurance are benefitting the most from a premium cap set at 8.5 percent of income: middle-income workers, who tend to pay a larger percentage of their income for an ACA policy, and older workers, who pay higher premiums because insurers view them as risky.

Before the caps were put in place, workers earning four or more times the federal poverty level did not get any subsidies and paid full price for ACA coverage. Without the assistance, for example, a 40-year-old earning about $51,500 would be paying 20 percent more – or $438 per month instead of the $365 she currently pays, according to the Kaiser Foundation.

Premiums would’ve been 62 percent higher in New York and more than double in Wyoming. …Learn More

Pharmacist attending to a customer

Mortgage Payoff Frees Up Money for Meds

Paying off the mortgage frees up a lot of money for other things. The homeowners in one study splurged on big-ticket items.

Older homeowners, however, are adding another priority: medications.

After a mortgage payoff, workers and retirees ages 50 to 64 spent 50 percent more on prescription drugs in a comparison with households who had no major changes in their monthly housing costs, according to a new study by Harvard’s Joint Center for Housing Studies and funded by the U.S Social Security Administration.

The mortgage is typically a homeowner’s largest monthly expense. If medication spending rises when this big bill is eliminated, it supports the argument that some aging homeowners who are still carrying a mortgage may be choosing housing over necessary medical care.

This research is particularly relevant at a time older Americans are entering retirement with more debt. In 2016, four in 10 retirees had a mortgage – double the share in the late 1980s.

Not surprisingly, the researchers found some indication that lower-income workers and early retirees benefited more from eliminating their monthly payments. They have difficulty paying even for essential expenses, and the increase in their prescription purchases after paying off the home loan appeared to be larger than for higher-income groups with fewer constraints.

The researchers split the homeowners into two age groups – under and over 65. While homeowners under 65 sharply increased their drug spending after the mortgage payments ended, the Medicare beneficiaries did not.

The level spending after Medicare eligibility indicates that the program relieves some of the pressure on the family budget, the researchers said. Medicare also provides an average $5,000 annually to subsidize low-income retirees’ medications under the Low Income Subsidy program.

But for older homeowners who are too young to get Medicare but are still paying a mortgage, the study “raises serious concerns for health care quality and the costs to treat poorly managed conditions,” the researchers said.

To read this study, authored by Christopher Herbert, Jennifer Molinsky, Samara Scheckler, and Kacie Dragan, see “Older Adult Out-of-Pocket Pharmaceutical Spending after Home Mortgage Payoff.”

A blog post last year featured a similar study – this one about the older Americans’ adherence to medications after …Learn More

Open enrollment

Need Help Choosing Your Medicare Options?

This blog is for the procrastinators. The last day of Medicare open enrollment for people who want to switch their Medicare Advantage or Part D insurance plans is Dec. 7.

The hoopla around this open enrollment period can be confusing, because Medigap supplemental plans are on a different schedule. The optimal time to buy a Medigap plan is during a six-month window after your 65th birthday, which is the only time insurers are required under federal law to sell you a Medigap policy. Switching to a different Medigap plan during the current open enrollment is trickier, because you can be denied coverage, though several states have made it easier to enroll or switch from Medigap or Advantage to a new Medigap plan.

Retirees with Advantage or Part D plans can freely change plans during open enrollment but are usually reluctant to shop around. But insurance experts warn that the terms of existing policies can change, and this is the time to see if there’s a better deal out there. The Kaiser Family Foundation said retirees have a record number of Advantage plans to choose from for 2022 – double the number available five years ago. But this can be a double-edged sword if choices sew confusion.

If you haven’t plunged into researching your Advantage or Part D options, the resources listed below can help.

Free counselors. Every state has a counseling program to explain the Medicare options. The counselors are free, and this website lists every state with a link to that state’s contact information. Although volunteer counselors may not be as knowledgeable as insurance brokers who sell the policies, many volunteers are former health care professionals or are themselves enrolled in Medicare and know the system. …Learn More

Healthcare Deductibles: the Burden Grows

At $140 billion, the nation’s unpaid medical bills are the single largest form of past due debt. One thing driving this is no doubt rising deductibles for health insurance.

Health Insurance CartoonA third of insured Americans said in a survey that it is difficult to pay the deductibles in their employer health insurance plans and in the policies sold on the Affordable Care Act (ACA) marketplaces.

Among employer-sponsored insurance plans, policies with high deductibles are becoming more pervasive, even in large corporations. Employers are choosing high-deductible plans in part to keep their workers’ monthly premiums at a reasonable level – a tradeoff that is inherent in health insurance.

But the sky-high cost of medical care can quickly run-up out-of-pocket spending in years when someone in the family becomes very ill or needs surgery. Average deductibles exceed $3,000 for a single worker’s policy in half of the U.S. companies with less than 200 workers. The family plan deductibles exceed $6,000 in more than 40 percent of small companies.

ACA plan deductibles are rising in almost every state and have surpassed $4,000 per year, on average, in 11 states from Arizona and Michigan to Oregon. A variety of plans are available on the exchanges, including plans with lower deductibles for people willing to pay higher premiums. But ACA premiums have also been rising, though the federal government has temporarily increased the premium subsidies as part of COVID-19 relief.

New research appearing in the July issue of the Journal of the American Medical Association (JAMA) estimates that medical bills made up more than half of all the consumer debt in collections last year. And the data are through June 2020 and don’t even reflect the full cost of caring for COVID patients. …Learn More

2.2 million Workers Left Out of Medicaid

The Affordable Care Act gives a carrot to states that expand Medicaid from a health insurance program mainly for poor people to one that also includes low-income workers.

Under the 2010 law, the federal government initially paid the full cost of adding more people to the Medicaid rolls, and a large majority of states have signed up. The federal funding for new expansions dropped a bit in 2020 to 90 percent and will remain there.

Yet 11 states are holdouts and haven’t expanded their programs, leaving nearly 2.2 million workers and family caregivers in what the Center for Budget and Policy Priorities calls the Medicaid coverage gap.

Medicaid Map

The workers falling in the gap, who would qualify for coverage if their states expanded Medicaid, do not have health insurance at their places of employment and can’t afford to buy subsidized insurance through the Affordable Care Act.

The bulk of the uncovered workers are in the South, with half in Texas and Florida. Missouri had been a holdout. But last week, the Missouri Supreme Court ordered the legislature to comply with a voter ballot initiative and fund expansion of the state’s Medicaid. Expansion was also controversial in Oklahoma, but it went into effect on July 1 after voters there approved the measure.

An analysis by the Center sketched a picture of who is in the gap, based on 2019 Medicaid data, the most recent available. People of color comprised about 40 percent of the working-age population but made up 60 percent of the people in the gap in the non-expansion states, the Center estimates.

Nationwide, one in four who lack access to Medicaid are lower-paid essential workers on the front lines during the pandemic. …Learn More

US Life Span Lags Other Rich Countries

Table of Life Expectancy in 2016Life expectancy for 65-year-olds in the United States is less than in France, Japan, Spain, Italy, Australia, Canada, the United Kingdom, the Netherlands, and Germany.

Fifty years ago, we ranked third.

First, some perspective: during that time, the average U.S. life span increased dramatically, from age 79 to 84. The problem is that we haven’t kept up with the gains made by the nine other industrialized countries, which has caused our ranking to slide.

A troubling undercurrent in this trend is that women, more than men, are creating the downdraft, according to an analysis by the Center for Retirement Research. The life expectancy of 65-year-old American women is 2½ years less than women in the other countries. The difference for men is only about a year.

The center’s researchers identified the main culprits holding us back: circulatory diseases, respiratory conditions, and diabetes.  Smoking and obesity are the two major risk factors fueling these trends.

Americans used to consume more cigarettes per capita than anyone in the world. That’s no longer true. In recent years, the U.S. smoking rate has fallen sharply, resulting in fewer deaths from high blood pressure, stroke, and other circulatory diseases.

But women haven’t made as much progress as men.  Men’s smoking peaked back in the mid-1960s, and by around 1990, the delayed benefits of fewer and fewer smokers started improving men’s life expectancy. Smoking didn’t peak for women until the late-1970s, and their death rate for smoking-related diseases continued to rise for many years after that, slowing the gains in U.S. life expectancy overall.  More recently, this pattern has reversed so that women are now beginning to see some improvement from reduced smoking.

Obesity is a growing problem across the developed world. But in this country, the obesity rate is increasing two times faster than in the other nine countries. Nearly 40 percent of American adults today are obese, putting them at risk of type-2 diabetes and circulatory and cardiovascular diseases. …Learn More