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New Study About Medicare Beneficiaries Emphasizes Importance of Access and Affordability

May 12, 2017

The future of Medicaid has been in the spotlight as Congress continues work on a repeal and replace plan for the Affordable Care Act (ACA). But the future of Medicare, which provides health insurance to 56 million people—17 percent of the U.S. population––also is a concern. Estimates suggest that one-fifth of the population will be covered by Medicare by 2024.

Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with permanent kidney failure. Because Pennsylvania is home to the fourth largest elderly population in the country, providers and lawmakers need to pay close attention to any policy discussions about Medicare.

The Pennsylvania State Data Center recently projected significant growth in the state’s older population:

  • The number of Pennsylvania residents ages 20 to 59 will shrink by 214,000 from 2015 to 2025, but the number of residents 60 and older will grow by 711,000, or almost 24 percent
  • While there were about 10 million residents under 60 in 2005, there will be fewer–– about 9.5 million––in 2025, but the number of people 60 and older will have risen by about 50 percent, from a little under 2.5 million to more than 3.7 million

A new report issued by The Commonwealth Fund found that more than one-fourth of Medicare  beneficiaries—an estimated 15 million elderly and disabled people—spent 20 percent or more of their household income on out-of-pocket medical expenses and monthly premiums during 2016. This includes cost-sharing and uncovered services.

The report also revealed that:

  • Beneficiaries with multiple chronic conditions or physical or mental disabilities are at the greatest risk for incurring high costs
  • Nearly one-third of those with three or more conditions spent 20 percent or more of their annual income on premiums and medical care
  • Overall, beneficiaries spent an average of $3,024 per year on out-of-pocket costs 
  • 5.4 million beneficiaries only have Medicare and lack supplemental coverage of any kind, so they face higher health care costs

The report points out that Medicare does not limit beneficiaries’ annual out-of-pocket spending and has relatively high cost-sharing requirements.

The Trump Administration has signaled that Medicare modernization is a priority. Just as the hospital community has advocated for access to affordable health insurance under any revised ACA plan, affordability is equally important for older and sicker Pennsylvanians.

HAP will continue to monitor activity by the Trump Administration and Congress related to changes to the Medicare program and the implications for health care delivery in the commonwealth.

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