Medicare-Covered Older Adults Are Satisfied with Their Coverage, Have Similar Access to Care as Privately-Insured Adults Ages 50 to 64, And Fewer Report Cost-Related Problems

Introduction

Health care spending accounts for nearly 18% of the U.S. economy and is projected to continue to rise for the foreseeable future. One factor driving this trend is the relatively high prices paid to health care providers for people who have private insurance through either an employer or purchased directly in the non-group market. Private insurers pay hospitals nearly double Medicare rates on average and pay physicians an average of 143% more than Medicare pays. These relatively high payments contribute to overall health care spending growth and higher per enrollee spending growth for people with private insurance. They also impact the premiums and out-of-pocket spending on deductibles and other cost-sharing that people pay.

Policymakers at the federal and state level have supported a range of proposals that aim to broaden coverage and improve affordability, including policies that adopt Medicare rates, or a multiple of Medicare rates. Recent KFF analysis found that health care spending for 60 to 64 year olds in large employer plans was 38% higher than 65 to 69 year olds with Medicare, suggesting that total health spending for these older adults could be lower, if, for example, 60 to 64 year olds in large employer plans were eligible to enroll in Medicare. However, some question whether a shift to Medicare rates for some privately-insured individuals would lead to lower levels of satisfaction and higher rates of access problems, or exacerbate affordability concerns. To inform this discussion, this analysis compares the experiences of privately-insured and Medicare-covered older adults.

Medicare beneficiaries and privately-insured adults with employer-sponsored and non-group coverage contribute to the cost of their health insurance and care through monthly premium payments, deductibles and other cost-sharing requirements at the point of service. People with Medicare pay monthly Medicare Part B premiums and may pay additional premiums for Medicare Part D prescription drug coverage, Medicare Advantage coverage, and supplemental insurance (if in traditional Medicare). In addition, Medicare beneficiaries incur costs for services in the form of deductibles, copayments and co-insurance that vary by type of service and source of coverage. There is no limit on out-of-pocket spending under traditional Medicare for benefits provided under Parts A and B, although most traditional Medicare beneficiaries have supplemental insurance (Medigap, retiree health or Medicaid) that covers much of these costs. In contrast, Medicare Advantage plans include a cap on out-of-pocket spending, but neither traditional Medicare nor Medicare Advantage provides a hard cap on prescription drug expenses. Premiums, cost-sharing requirements, and gaps in benefits (such as dental and long-term services and supports) contribute to relatively high out-of-pocket costs.

Most people with employer-sponsored coverage and private insurance in the non-group market are subject to varying amounts of annual premiums, deductibles, and fixed copayment or coinsurance amounts for services received and generally have coverage that includes a cap on out-of-pocket costs, which is a requirement of the Affordable Care Act. The specific premium and cost-sharing amounts vary, both across and within insurance types. Relatively high fees paid to providers contribute to higher costs per person and higher premiums and other out-of-pocket spending among enrollees. Further, because health needs and health spending rise with age, the financial burden of health care rises with age among non-elderly people with private insurance.

Even though private insurance typically reimburses physicians at a higher rate than Medicare, Medicare beneficiaries have broad access to providers. The vast majority (97%) of all physicians participate in the Medicare program, which means that they agree to accept the established Medicare payment rates, and very few (1%) physicians have formally opted-out of the Medicare program. Employer and non-group private health insurance plans rely more on networks that may restrict access to certain providers, as do Medicare Advantage plans, which cover 39% of beneficiaries.

This brief begins with a look at rates of satisfaction and access indicators among Medicare-covered adults ages 65 and older (including those enrolled in both traditional Medicare and Medicare Advantage). It then examines whether privately-insured adults ages 50 to 64 report better or worse access to care than Medicare beneficiaries ages 65 and older. It also compares cost-related problems for both groups. Access and affordability in private insurance and Medicare are driven by many factors, including provider participation, scope of benefits, and required cost sharing.

In this analysis, we do not attempt to model whether extending Medicare’s payment structure to a subset of people who are currently covered by private insurance, such as those ages 60 to 64, would affect provider participation in the program, the amount of health care services people use, or the ability of the health care system to meet demand for care. However, this brief does provide insight based on the experience of beneficiaries covered under the current Medicare program. A detailed description of our methodology is included in the appendix.

Findings

Our analysis finds the vast majority of Medicare beneficiaries ages 65 and older report high levels of satisfaction with the Medicare program and few access problems. When comparing older (65-plus) adults with Medicare to privately-insured adults ages 50 to 64, we find a larger share of privately-insured adults report cost-related problems, such as delaying getting medical care because of cost, needing medical care but not getting it because of cost, or problems paying or inability to pay any medical bills—a pattern that is particularly pronounced for those in relatively poor health. This may be counter to expectations because Medicare-covered adults ages 65 and older tend to be sicker and use more health services than privately-insured adults ages 50 to 64.

Overall, Medicare-covered adults ages 65 and older are satisfied with their care; few have trouble getting needed care

Most Medicare beneficiaries ages 65 and older report being satisfied with their care. The vast majority of Medicare beneficiaries ages 65 and older (94%) report being very satisfied or satisfied with the quality of their medical care, with no significant differences by race and ethnicity, gender, and metropolitan status, according to data from the 2018 Medicare Current Beneficiary Survey (MCBS). A slightly smaller share of Medicare beneficiaries in self-reported fair or poor health (91%) report being very satisfied or satisfied than those in self-reported excellent, very good, or good health (95%) (Figure 2, Table 1). The MCBS only includes Medicare beneficiaries, and does not include a comparison group of adults with private insurance. While the 2019 NHIS includes a comparison group of privately-insured adults, it does not include measures of satisfaction. A 2020 survey by the Medicare Payment Advisory Commission (MedPAC)  found that larger shares of Medicare beneficiaries ages 65 and older (88%) reported being very or somewhat satisfied with the overall quality of their health care than privately-insured adults ages 50 to 64 (82%).

Nearly 9 in 10 (87%) Medicare beneficiaries ages 65 and older report being very satisfied or satisfied with the availability of care by specialist, with no significant differences by race and ethnicity, gender, or self-reported health status (Figure 2). A slightly larger share of Medicare beneficiaries ages 65 and older in metropolitan areas (88%) report being very satisfied or satisfied with the availability of care by specialists than adults ages 65 and older in rural areas (83%) (Table 1).

Few Medicare beneficiaries ages 65 and older report trouble getting needed health care or forgoing needed medical care. A small share (5%) of all Medicare beneficiaries ages 65 and older report trouble getting needed health care and a similarly small share (5%) report that they had a problem for which they should have seen a doctor but didn’t (Table 1).

A somewhat larger share of Medicare-covered adults ages 65 and older in relatively poor self-assessed health report trouble getting needed health care (10%) or having a problem for which they should have seen a doctor but didn’t (11%) than beneficiaries in better health (4% for each measure). Somewhat larger shares of Black and Hispanic Medicare beneficiaries report trouble getting needed care (7% and 8%, respectively) than White Medicare beneficiaries (4%), though there are no significant differences by race and ethnicity in the shares of Medicare beneficiaries with problems for which they should have seen a doctor but didn’t (Table 1).

The vast majority of privately-insured adults ages 50 to 64 and Medicare-covered adults ages 65 and older have a usual source of care

The vast majority of privately-insured adults ages 50 to 64 and Medicare beneficiaries ages 65 and older report having a usual source of care. Analysis of 2019 data from the National Health Interview Survey (NHIS) finds that 96% of both privately-insured adults ages 50 to 64 and Medicare-covered adults ages 65 and older report having a usual source of care (Table 2).

Among those with a usual source of care, the majority of privately-insured adults ages 50 to 64 (89%) and Medicare-covered adults ages 65 and older (90%) report a usual source of care other than an emergency room or urgent care, such as a doctor’s office or health center. This is generally true without regard to race/ethnicity, gender, self-reported health status, and metropolitan status.

A larger share of privately-insured adults ages 50 to 64 than Medicare-covered adults ages 65 and older report affordability problems

A larger share of privately-insured adults ages 50 to 64 than Medicare-covered beneficiaries ages 65 and older report having cost-related problems (16% versus 11%, respectively) (Figure 3, Table 3). Cost-related problems include delaying getting medical care because of cost, needing medical care but not getting it because of cost, or problems paying or inability to pay any medical bills during the past 12 months.

The affordability gap between privately-insured adults 50 to 64 and Medicare-covered adults ages 65 and older is more pronounced among those in worse health. For example, among adults in fair or poor self-assessed health, one-third (33%) of privately-insured adults ages 50 to 64 report at least one cost-related problem compared to one-fifth (20%) of Medicare beneficiaries ages 65 and older. Additionally, among adults with 5 or more chronic conditions, the share of privately-insured adults ages 50 to 64 with cost-related problems (42%) is more than double the share reported by Medicare-covered older adults (19%).

Consistent with the overall findings, larger shares of 50 to 64-year-old privately-insured women, men, and people in both urban and rural areas report cost-related problems than their counterparts with Medicare. Notably, the shares of privately-insured Black and Hispanic adults ages 50 to 64 with cost-related problems are not significantly different from the share of Black and Hispanic Medicare-covered older adults reporting cost-related problems, although cost-related problems are more common among White privately-insured adults ages 50 to 64 than White Medicare-covered adults ages 65 and older.

However, within both private insurance and Medicare, larger shares of Black and Hispanic adults report cost-related problems compared to White adults with the same type of insurance. Among people ages 50 to 64 with private insurance, 21% of Black enrollees, 18% of Hispanic enrollees, and 15% of White enrollees report cost-related problems. Within Medicare, 23% of older Black beneficiaries, 17% of older Hispanic beneficiaries, and 9% of older White beneficiaries report cost-related problems.

Nearly half of privately-insured adults ages 50 to 64 report worries about the ability to pay medical bills compared to a third of Medicare beneficiaries ages 65 and older. A larger share of privately-insured adults ages 50 to 64 than Medicare-covered adults ages 65 and older report being very or somewhat worried about being able to pay medical bills if they were sick or had an accident (48% versus 33%). Again, the differences were larger for those in worse health or with more chronic conditions. Specifically, 64% of privately-insured adults ages 50 to 64 in self-assessed fair or poor health report being worried about paying medical bills compared to less than half (42%) of Medicare beneficiaries ages 65 and older in self-assessed fair or poor health. Among adults with 5 or more chronic conditions, the share of privately-insured adults ages 50 to 64 with worries about paying medical bills (66%) is larger than the share among Medicare beneficiaries ages 65 and older (39%). This pattern persists even among adults with fewer (3-4) chronic conditions (Figure 4, Table 3).

Larger shares of 50 to 64-year-old privately-insured women, men, and people in urban and rural areas report worries about their ability to pay medical bills than their counterparts ages 65 and older with Medicare. We also observe that among older adults with Medicare, larger shares of Black and Hispanic beneficiaries (43% and 44%, respectively) than White beneficiaries (30%) report worries about being able to pay medical bills. Additionally, among privately insured adults ages 50 to 64, a larger share of Hispanic than White adults report worries about paying medical bills (58% and 47%, respectively); the difference between privately insured Black and White adults ages 50 to 64 is not statistically significant. Across the two insurance groups, larger shares of privately-insured White and Hispanic adults ages 50 to 64 than Medicare-covered White and Hispanic older adults report worries about their ability to pay medical bills; the difference in the share of Black adults with worries about being able to pay medical bills is not statistically significant.

Discussion

Our analysis finds that most adults ages 65 and older with Medicare have relatively good access to care and are satisfied with the quality of the care they receive, consistent with previous analyses. Additionally, adults ages 65 and older with Medicare report comparable access to care as privately-insured adults between 50 and 64. These findings suggest that lower Medicare reimbursement rates relative to private insurance do not generally inhibit the ability of adults ages 65 and older to receive health care services.

These findings are consistent with past research, particularly analyses by the Medicare Payment Advisory Commission (MedPAC), which show that Medicare beneficiaries ages 65 and older had similar or better satisfaction rates and ability to find a new primary care physician or specialist compared to privately insured adults ages 50 to 64. Our analysis contributes to the body of evidence on the experience of Medicare beneficiaries compared to those with private insurance by also analyzing how cost-related problems compare between the two insurance groups. We find that a smaller share of adults 65 and older with Medicare than privately-insured adults ages 50 to 64 face cost-related problems, and these differences are more pronounced for people in worse health. However, a number of other studies have separately documented the financial burden of health care for people on Medicare, when premiums for supplemental insurance and uncovered services are taken into account.

Our primary focus in this analysis was to examine whether adults ages 50 to 64 with private insurance report different access to care or encounter cost-related problems in accessing care at different rates than adults ages 65 and older with Medicare. In comparing measures for certain subgroups, we also observe that Black and Hispanic adults within each insurance group often face higher rates of cost-related problems than White adults. This may be due in part to the fact that White adults tend to have more financial assets and lower utilization of costly-services such as inpatient stays and emergency department visits compared to Black and Hispanic adults. While there is additional help with premium and cost-sharing for Medicare beneficiaries and enrollees in the ACA Marketplaces with the lowest incomes and fewest assets, eligibility for that assistance may not fully account for financial vulnerability.

The higher rates of cost-related problems among privately insured adults ages 50 to 64 may be attributable to differences in benefit design, including deductibles, coinsurance rates and other factors, such as the scope of covered services. In addition, relatively high prices paid by private insurance for health care services contribute to higher out-of-pocket costs for enrollees. This is because the amounts paid by enrollees for health care services (e.g. deductibles and coinsurance) are often determined by price, and premiums are set to cover a set percentage of expected health care spending, compounding differences in cost-related problems that may be due to benefit design.

Any future health proposals that would build on Medicare or public coverage to rein in high health care costs, such as through a public option or by lowering the age of Medicare eligibility to 60, may help to mitigate cost-related problems that people with private insurance experience. These changes may be especially salient for people with greater health needs, including those in self-reported fair or poor health and those with multiple chronic conditions, who may utilize more services and incur higher out-of-pocket expenditures for their health care. While we did not attempt to model the impact of policies on provider behavior or access to care, our analysis shows that Medicare’s current reimbursement levels are not associated with cost or access problems.