A new Kaiser Family Foundation analysis and chartbook break down what beneficiaries with traditional Medicare pay for their health care, including insurance premiums, and costs for medical and long-term care services. The analysis highlights the significant variations in what people pay based on the services they use, and their age, gender and other characteristics, and highlights trends in out-of-pocket spending.
Based on the latest available data from a nationally representative survey of people on Medicare, the analysis shows that beneficiaries themselves paid on average about $4,700 for their health coverage in 2010, taking into account supplemental coverage, such as retiree health benefits or Medigap policies. It includes a special focus on spending among beneficiaries with significant health needs and those living in long-term care facilities, who use more services and incur higher out-of-pocket costs. It also looks at which groups of beneficiaries are more likely to be in the top quartile in terms of out-of-pocket costs. This group spends, on average, $11,500 – more than twice as much on premiums and services as a typical beneficiary.
The analysis shows that out-of-pocket spending rises significantly for beneficiaries with multiple hospitalizations. Patients with a hospital readmission within 30 days of discharge spent roughly $1,200 more on services than those with only one inpatient stay in 2010, including higher spending for medical providers and supplies, inpatient hospital services, and skilled nursing facility (SNF) services. These findings suggest that ongoing efforts to improve the coordination of care to prevent avoidable hospital readmissions and manage post-acute services could not only reduce Medicare’s costs, but also could significantly lower beneficiaries’ out-of-pocket spending.
How Much Is Enough? Out-of-Pocket Spending Among Medicare Beneficiaries: A Chartbook provides context for policy discussions about changes to Medicare that could affect beneficiaries’ out-of-pocket spending.