Most Seniors Can’t Pony Up More for Health Care

A new Kaiser Family Foundation tool shows the harsh reality of trying to shift more Medicare costs to already-strapped seniors.

If you think seniors can afford to pay more for Medicare, let’s take another look at that thought.

Why is this important? House Republicans have been calling for an end to traditional Medicare, instead favoring a voucher program where seniors pay for private plans. The latest proposal would give seniors a choice of using a government subsidy to either buy private insurance or pay for Medicare premiums in 2024.

Many believe a subsidy program would shift more health care costs to seniors over time. Also, if new retirees picked private insurance, traditional Medicare would become much more expensive for those who continued to use it because they’d likely be older and in poorer health.

“The Congressional Budget Office has estimated that this effect could boost traditional Medicare premiums 50 percent by 2020 compared with current projections,” Reuters said.

Seniors covered by Medicare are already paying for a chunk of their health care costs. According to the Employee Benefit Research Institute, Medicare covered about 62 percent of health care costs for seniors in 2010. Private insurance covered 13 percent and seniors paid 12 percent of costs.

Out-of-pocket health care costs totaled about $4,760 in 2011 for a 65-year-old in poor health and $4,450 for a 65-year-old in good health, according to U.S. News & World Report. By age 75, those numbers increased to $5,635 for someone in poor health and $5,220 for a senior in good health.

Reuters said:

HealthView Services, which develops software for gauging health care costs, recently estimated that a senior retiring this year in high-cost Massachusetts would pay $7,020 in Medicare premiums alone — a number that will jump to $11,536 in 2024. And that figure doesn’t include co-pays and out-of-pocket costs for things Medicare doesn’t cover, such as dental care. It also doesn’t include costs for a catastrophic event.

So, can seniors afford to pay more? Check out a new interactive Medicare recipient income and assets tool from the Kaiser Family Foundation to find your answer. Reuters did. Among the results:

  • Fifty-three percent of Medicare recipients had $25,000 or less in annual income in 2013. Just 4 percent had income of more than $100,000. And nearly 27 percent had income below $15,000.
  • Half of seniors had savings accounts with less than $61,400 and home equity below $67,700 on a per-person basis.
  • “Median 2013 per capita income for white Medicare beneficiaries was $26,400, compared with $16,350 for African Americans and $13,000 for Hispanics,” Reuters said. While men’s median income was $25,880, women’s income was $21,800.

Kaiser told Reuters that just 5 percent of Medicare recipients will have income of more than $111,900 in 2030, while half will have less than $28,250 to live on.

“There will always be a small share of the Medicare population with sufficient wealth and resources to absorb higher costs, but most will not be in that position,” [KFF executive Tricia Neuman] says. “The assumption that boomers are healthier and wealthier and that we’ll have a much rosier Medicare outlook down the road just isn’t going to happen.”

Do you support attempting to shift Medicare’s growing costs to seniors? Share your thoughts below or on our Facebook page.

Stacy Johnson

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  • grandmaguest

    So far this year I have spent more on just my medicare premiums than I have for groceries….and I spend around $200 a month on groceries. My social security income is less than the average $1200 or so a month so I only shop the grocery sales and only buy fresh fruits and veggies in season and on sale. It’s the only way I can afford it and still try to keep some back up savings to pay for any prescriptions and doctor’s visits that medicare doesn’t cover. Thank goodness I am relatively healthy and have my fingers crossed that I stay that way. There is no way I could afford to spend another $10K a year on health care and still be able to pay for the necessities such as my electric bill and eat. I don’t have cable or pretty much anything that isn’t a need to live on. Heck even my car is a 2001 (paid for) Focus. Heaven forbid I should have to buy another….but I’m afraid that will probably happen.
    I try very hard to be frugal and save as much as possible for the unexpected emergencies of life… they ALWAYS pop up. Usually just when I think I’ve finally been able to save some money in the bank. But then I guess that’s why they call it an “emergency fund”. Whoops, there goes the fridge, the car needs new tires, eek I need a new roof (that was a killer) or a new septic tank. Oh well, I will keep plugging along as that is the story of life. While not wealthy, I’ve managed so far to be relatively comfortable with my life and my 7 year old laptop…it still works just fine thank you, and I see no need to replace it with the latest and greatest.
    Yep, getting old sometimes isn’t a lot of fun….but it sure beats the alternative.

  • pennyhammack

    It’s already happening and it’s not pretty. Medicare is not free. Part A, for hospitalizations is free for most people but Part B for doctor visits is $104.90 per month and my supplemental costs $250 per month. Part D for prescription medications is another $47 per month. But that’s not all – according to my pharmacist, this year Medicare no longer covers several classes of prescription drugs such as pain medicine, medication for skin problems and antibiotics. In other words, medicines that seniors are most likely to need. It also doesn’t cover over the counter medicines, even those that your doctor suggests that you take, or such necessities as bandages or adult diapers. The Part D coverage has also promoted many drugs from Tier one – the lowest cost to higher Tiers making the cost higher even on generic drugs. Then you have the infamous Donut Hole or Coverage Gap which is supposed to be shrinking but they are making up the difference in the higher co-pays we pay before we reach the donut hole. Two years ago I was in pretty good shape financially but now with my higher medical costs I’m just treading water. Next year promises to be even worse.

  • smokey347

    seems as if ms steinmetz wants to lay the problem at the feet of the repubs but how about barry wanting to cut billions from medicare to pay for obozocare? any comment there ma’am?

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