Medicare has been a great help to the health and wellness of people 65 years old and above and with significant disabilities. At present, the program covers a portion of health care costs for more than 47 million people in the United States alone.

While Medicare is necessary in helping older people pay for necessary services, beneficiaries on the other hand are required to share in those costs. Recently, there are several factors such as policies by lawmakers and economic downturn that caused the cost of services and care to shift further to the beneficiary. This has resulted in high out-of-the-pocket health care costs for Medicare beneficiaries.

Medicare beneficiary spending consumes almost the same percentage as that of the total household expenditure as transportation and food. With the cost of the essentials keep on rising, beneficiaries are faced with big challenges to maintain their health and daily necessities.

Higher Out-of-Pocket Expenses and their Effects

The threat of taking even more from their income endangers not only their financial stability, but even the health of these vulnerable beneficiaries. Though some policy makers contend that requiring Medicare beneficiaries to pay more out-of-pocket for their health care makes them better health care consumers and reduces “unnecessary” care, studies show that increased cost-sharing in fact often has serious adverse effects on beneficiaries.

  • Increased cost-sharing and out-of-pocket expenses disproportionately affect women and minorities, who may forgo critical prevention screenings and skimp on medications due to high costs.  Poor beneficiaries, in particular, are more likely to suffer severe health outcomes including hospitalization and death when faced with higher cost-sharing.
  • In a poll conducted recently, 86% of those over the age of 65 and 89% of those aged 18-64 opposed requiring seniors to pay a larger share of Medicare costs out of pocket.
  • Increased cost-sharing has been shown to have a direct negative effect on beneficiary utilization of necessary services, appropriate drug use, and health outcomes. Some studies have suggested that cost-sharing increases mortality rates among older people.
  • Similarly, studies suggest that rising out-of-pocket expenses lead beneficiaries to make tough choices about their health, including not complying with prescribed drug use due to cost, forgoing necessities, or borrowing money to pay for prescriptions. As a result of this, higher co-payments backfire and lead to much higher overall costs as beneficiaries put off care and prevention until they need expensive emergency care.

Medicare is facing substantial challenges as the overall cost of health care continues to rise and as the population gets older. The Affordable Care Act started to address these changes through payment and delivery system reforms, and through an increased focus on eliminating fraud, waste and abuse.

Nevertheless, proposals to move the responsibility of costs for healthcare to beneficiaries who are actually reeling from the financial downturn and other rising costs are short-sighted, risk the health and wellness of Medicare beneficiaries, and place an additional financial burden on them and the families. Strengthening the traditional Medicare program through other cost-saving approaches while avoiding further cost-shifting to beneficiaries is vital to ensuring that Medicare remains accessible and reliable for the next generations.