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Study: Medicare reduces older adults' risk for catastrophic health expenses

Medicare reduces out-of-pocket costs and risk for catastrophic health expenses among older adults, according to a new study. File Photo by bee boys/Shutterstock
Medicare reduces out-of-pocket costs and risk for "catastrophic" health expenses among older adults, according to a new study. File Photo by bee boys/Shutterstock

Sept. 10 (UPI) -- Older adults' out-of-pocket healthcare expenses drop by 27% once they enroll in Medicare, improving their protection from financial risk, a study published Friday by JAMA Health Forum found.

This is despite a 5% increase in annual medical expenses accrued after turning age 65, the data showed.

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And although nearly 9% of adults age 64 experienced "catastrophic" health expenses -- or costs exceeding 40% of annual income minus spending on food and housing -- enrolling in Medicare, usually at age 65, reduced their risk for these financial problems by 35%, the researchers said.

"The financial burden of paying for healthcare -- sometimes referred to as financial toxicity -- is high for older adults in their sixties," study co-author John W. Scott told UPI in an email.

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However, "Medicare really improves financial risk protection for older adults ... reducing the age of Medicare eligibility would go a long way in reducing the financial burden of healthcare spending," said Scott, an assistant professor of surgery at the University of Michigan in Ann Arbor.

Adults age 65 and older and those with certain physical disabilities are eligible for Medicare, a federal program designed to provide baseline health coverage for seniors, according to the Centers for Medicare and Medicaid Services.

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Earlier this month, Democrats in the House of Representatives introduced legislation that would lower Medicare eligibility to age 60 years, though opponents have argued that such a move would necessitate tax increases and lead to a rise in federal spending.

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Such a move could also add to the financial burdens faced by hospitals, some have argued.

Still, a survey conducted earlier this year found that up to 20% of adults in the United States are unable to afford needed healthcare services.

For this study, Scott and his colleagues analyzed healthcare spending data for nearly 25,000 adults ages 57 to 73 from across the United States.

The data covered all healthcare expenditures over a five-year period between 2014 and 2018.

Just under 92% of the people included in the analysis incurred medical expenses during the five-year period. At age 64, those in the study averaged roughly $25,000 per year in total healthcare charges, according to the researchers.

On average, 64-year-olds included in the study had more than $1,400 in annual out-of-pocket healthcare costs, and 5% were uninsured.

After turning age 65, and enrolling in Medicare, annual out-of-pocket costs for these participants fell by nearly $400, the data showed.

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In addition, Medicare coverage led to a 17% reduction in those who delayed seeking care due to an inability to pay.

"This study has important implications for the current discussions around 'Medicare for all' or 'Medicare for more,'" Scott said.

"A public health insurance option that has low cost sharing could greatly benefit millions of patients who are currently uninsured or who have expensive insurance that doesn't actually provide them the protection they need," he said.

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