Wednesday, January 31, 2018

Rising Health Care Costs to Outpace COLAs?

The Washington Post ran an article looking at the longer-term impact of the increasing costs of health care on any COLAs from SSA. Out-of-pocket health-care costs likely to take half of Social Security income by 2030, analysis shows discusses a recent Kaiser Family Foundation which "found out-of-pocket health-care costs for Medicare beneficiaries are likely to take up half of their average Social Security income by 2030."  The KFF report, Medicare Beneficiaries’ Out-of-Pocket Health Care Spending as a Share of Income Now and Projections for the Future was published January 26, 2018. Here is the executive summary

Medicare helps pay for the health care needs of 59 million people, including adults ages 65 and over and younger adults with permanent disabilities. Even so, many people on Medicare incur relatively high out-of-pocket costs for their health care, including 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 financial burden of health care can be especially large for some beneficiaries, particularly those with modest incomes and significant medical needs. Understanding the magnitude of beneficiaries’ current spending burden, and the extent to which it can be expected to grow over time, relative to income, provides useful context for assessing the implications of potential changes to Medicare or Medicaid that could shift additional costs onto older adults and younger people with Medicare.

In this report, we assess the current and projected out-of-pocket health care spending burden among Medicare beneficiaries using two approaches. First, we analyze average total per capita out-of-pocket health care spending as a share of average per capita Social Security income, building upon the analysis conducted annually by the Medicare Trustees. Second, we estimate the median ratio of total per capita out-of-pocket spending to per capita total income, an approach that addresses the distortion of average estimates by outlier values for spending and income. Under both approaches, we use a broad measure of Medicare beneficiaries’ total out-of-pocket spending that includes spending on health insurance premiums, cost sharing for Medicare-covered services, and costs for services not covered by Medicare, such as dental and long-term care. We present estimates of the out-of-pocket spending burden for Medicare beneficiaries overall, and by demographic, socioeconomic, and health status measures, for 2013 and projections for 2030, in constant 2016 dollars.

A pdf of the report is available here.

Consumer Information, Current Affairs, Federal Statutes/Regulations, Health Care/Long Term Care, Medicare, Retirement, Social Security | Permalink


I have been writing about this for years. My colleagues and I have a software tool to help. So many pre-retirees and retirees have no clue how Social Security and Medicare work. Even worse? Many financial advisors do not know either.

Posted by: ROBERT A KLEIN | Feb 1, 2018 7:59:46 AM

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