Increasing Medicare Out-of Pocket Costs: How Would It Affect Vulnerable Seniors?
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Increasing Medicare Out-of Pocket Costs: How Would It Affect Vulnerable Seniors?

January 14, 2013

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As Congress seeks to cut the federal budget deficit, Medicare is emerging as a prime target—despite recent cuts of $716 billion and significant reductions in spending growth.

Several proposals would reform Medicare by shifting more costs onto the people who use the program—through higher premiums, copays, and other costs.

This would make health care unaffordable for millions of older Americans for these reasons: 

  1. Most people with Medicare have low or modest incomes.
    In 2010, half of all people with Medicare lived on incomes less than $22,000 per year—just under 200% of the federal poverty level.

  2. Many beneficiaries are in poor health.
    Nearly half of the Medicare population has three or more chronic conditions.

  3. Health care costs are a significant expense for people with Medicare.
    In 2010, the average Medicare household spent $4,500 per year on health care—three times more than non-Medicare households as a percentage of income.

  4. Out-of-pocket costs are already increasing.
    Median out-of-pocket costs for Medicare beneficiaries are projected to rise to 26% in 2020.

  5. Under Medicare, many health care needs are not covered.
    Medicare does not cover dental, vision, and most long-term care services and supports.

  6. Increased cost sharing often leads to adverse health consequences.
    Higher costs often lead people to forgo necessary services, such as prescriptions.

Get more stats from the Leadership Council of Aging Organizations.