Fwd: qotd: Medicare's failure to protect personal finances

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-------- Original Message --------
Subject: qotd: Medicare's failure to protect personal finances
Date: Wed, 19 Sep 2012 12:33:55 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Journal of General Internal Medicine
September 5, 2012
Out-of-Pocket Spending in the Last Five Years of Life
By Amy S. Kelley, Kathleen McGarry, Sean Fahle, Samuel M. Marshall,
Qingling Du and Jonathan S. Skinner

Abstract

Background
A key objective of the Medicare program is to reduce risk of financial
catastrophe due to out-of-pocket healthcare expenditures. Yet little is
known about cumulative financial risks arising from out-of-pocket
healthcare expenditures faced by older adults, particularly near the end
of life.

Design

Using the nationally representative Health and Retirement Study (HRS)
cohort, we conducted retrospective analyses of Medicare beneficiaries'
total out-of-pocket healthcare expenditures over the last 5 years of life.

Participants
We identified HRS decedents between 2002 and 2008; defined a 5 year
study period using each subject's date of death; and excluded those
without Medicare coverage at the beginning of this period (n = 3,209).

Main Measures

We examined total out-of-pocket healthcare expenditures in the last 5
years of life and expenditures as a percentage of baseline household
assets. We then stratified results by marital status and cause of death.
All measurements were adjusted for inflation to 2008 US dollars.

Results

Average out-of-pocket expenditures in the 5 years prior to death were
$38,688 for individuals and $51,030 for couples in which one spouse
dies. Spending was highly skewed, with the median and 90th percentile
equal to $22,885 and $89,106, respectively, for individuals, and $39,759
and $94,823, respectively, for couples. Overall, 25% of subjects'
expenditures exceeded baseline total household assets, and 43% of
subjects' spending surpassed their non-housing assets. Among those
survived by a spouse, 10% exceeded total baseline assets and 24%
exceeded non-housing assets. By cause of death, average spending ranged
from $31,069 for gastrointestinal disease and $66,155 for Alzheimer's
disease.

Conclusion
Despite Medicare coverage, elderly households face considerable
financial risk from out-of-pocket healthcare expenses at the end of
life. Disease-related differences in this risk complicate efforts to
anticipate or plan for health-related expenditures in the last 5 years
of life.

http://www.springerlink.com/content/427m88565153p76k/

And...

The New York Times
September 17, 2012
Grappling With Details of Medicare Proposals
By Roni Caryn Rabin

The (Medicare reform) proposals keep changing, and some are short on
details. No one is certain what health care costs will be in the coming
years.

Still, it's clear the proposed changes would shift costs from the
federal government to retirees. "All scenarios will require seniors to
pay more," said Robert Moffit, senior fellow at the Heritage Foundation,
a conservative research organization in Washington. To think otherwise,
he said, "is a fantasy."

http://well.blogs.nytimes.com/2012/09/17/grappling-with-details-of-medicare-proposals/?hpw


Comment: In spite of having Medicare coverage, out-of-pocket health
care expenditures can be devastating for seniors. Current proposals to
reduce government entitlement spending on Medicare would shift even more
costs to our seniors.

Premium support voucher proposals for Medicare would create a defined
contribution which would shift more costs to all Medicare beneficiaries,
when only the wealthier could afford the increase. That won't work.

Since many already can't pay their current out-of-pocket costs,
proposals have been advanced to index costs to income by charging higher
premiums, higher cost sharing and/or reducing benefits for the
wealthier. That process has already begun with Part B and Part D
premiums now based on income. That risks reducing support by the
politically connected affluent, which could clear the way for enactment
of destructive government policies, especially if the conservatives
gained control. The threat from the liberals is bad enough.

On the other hand, lower income individuals could be given support
beyond that of Medicare. Again, that is already happening through the
dual-eligible program for both Medicare and Medicaid. The risk is that
the dual-eligible program would be considered a welfare program for the
poor, and would be budgeted accordingly. That is already happening as
the federal and state governments are well along in the process of
herding these victims into underfunded, low quality, private Medicaid
managed care programs (see
http://www.pnhp.org/news/2012/september/herding-dual-eligibles-into-low-quality-plans).

Obviously Medicare needs a lot of improvement before we convert it into
a single payer national health program. We need to go in the opposite
direction from where the politicians currently are headed. Instead of
slashing it under the budget hawks' call for cutting back on
entitlements, we need to expand its coverage so that it doesn't leave
anyone with the devastating out-of-pocket expenses associated with
complex and prolonged medical care.

Even though more would be spent through the Medicare program (i.e.,
through the tax system), the efficiencies of single payer would not
increase our total health care costs, and, more importantly, would slow
future health care cost increases to sustainable levels. It's not that
we can't afford to expand Medicare; it's that we can't afford not to.