New York Estate Planning & Elder Law Blog
A recent study by the Kaiser Family Foundation examining current and projected trends for out of pocket expenses related to care provided by Medicare found the country’s elders and those living with disabilities can expect those payments to increase. Those out of pocket expenses include health care services such as insurance premiums, deductibles, cost sharing for Medicare-covered services, as well as spending on services not covered by Medicare, such as long-term services and supports and dental care.
The study assessed the current and projected out of pocket expenses for those receiving Medicare benefits by averaging out of pocket spending relative to Social Security income and then estimating increases over the next several years. What the study found was that older Americans can expect to pay much more in out of pocket expenses as a share of their social security income over the next 12-years.
In 2013, Americans receiving Medicare benefits paid on average 41 percent of their Social Security income to out of pocket expenses not covered by the program, according to the Kaiser Family Foundation report. Those costs are expected to climb as high as 50-percent by 2030 and may affect women 85-years and older especially hard.
Furthermore, half of those currently receiving Medicare benefits spend at least 14-percent of their per capita total income on out-of-pocket health care cost and that number is even higher for those 85-years and older and those with more modest incomes. By 2030 42 percent of those on Medicare are expected to spend at least 20 percent of their total income on health-related out-of-pocket costs.
According to the study, the findings suggest those living on tighter budgets could be adversely affected should lawmakers implement new policy changes aimed at tinkering with the Affordable Healthcare Act (ACA) and Social Security. Additionally, those receiving Medicare benefits due to a permanent disability could see a reduction in the value of the services they receive should changes to Medicare eligibility be enacted.
Currently, Medicare helps pay for the medical expenses of almost 60 million Americans for those over the age of 65 and those who have a permanent disability. The report, funded in part by the AARP Public Policy Institute, believes serious changes to Medicare could have a disproportionate impact on those with the lowest amounts of income and pose a serious crisis to the nation’s social welfare.