Study: Adults Near Medicare Eligibility Spend Heavily On Health Care

Lowering the Medicare eligibility age may have some financial perks for older adults, according to a new study.

The current age to qualify for Medicare is 65, but researchers say that shaving off one or two years could save people in their early 60s who spend a majority of their “disposable income on health care costs” a lot of money.

“The financial burden of paying for health care — sometimes referred to as ‘financial toxicity’ — is high for older adults in their 60s,” John W. Scott, an assistant professor of cardiac surgery at the University of Michigan, said in a news release. “With the rise in high-deductible commercial health insurance plans, simply having health insurance is not enough to protect patients from high out of pocket health care costs. Medicare really improves financial risk protection for older adults, and reducing the age of Medicare eligibility would go a long way in reducing the financial burden of health care spending for those who are not quite 65.”

University of Michigan researchers looked at data from the Medical Expenditure Panel Survey to see how 24,700 people in their late 50s through early 70s spent on out-of-pocket costs for health care, including co-pays and deductibles, from 2014 to 2018.

The findings, published in the JAMA Health Forum, suggest that 13% of 64 year olds had incomes low enough to be covered by Medicaid, and nearly all of them were covered by the time they were 66.

The average cost adults paid for out-of-pocket health care dropped 27% from age 64 to 66 — even though incomes “stayed about the same” and average health care costs increased by 5%, researchers said.

Nearly 9% of 64 year olds reported health care costs taking up more than 40% of income “they had left after paying for food and housing,” according to the researchers. By age 66, that number dropped to 35%.

“The lack of Medicare benefits for some types of care, including dental, vision and hearing may have contributed to the fact that 5.8% of 66 year olds still spent more than 40% of their disposable income on health costs,” researchers said.

The number of older adults who had no health insurance went from 5% at age 64 to almost none at age 66, researchers said.

When researchers compared people before and after they were eligible for Medicare, those who delayed health care dropped by 17%.

“Unaffordable care isn’t just bad for someone’s wallet, it’s bad for their health,” Scott said in the news release.

More than 60 million seniors and other adults with “significant long-term” disabilities are covered by Medicaid, according to the Kaiser Family Foundation.

The 2022 budget from President Joe Biden’s administration proposes lowering the Medicare eligibility age from 65 to 60, according to the Kaiser Family Foundation. A group of 150 House Democrats, meanwhile, want a provision that lowers the age to 60 or 55 to be included in the President’s American Families Plan.

The budget proposal doesn’t address how lowering the age would work, how it would be funded, or how it would affect current enrollees, the Kaiser Family Foundation reported.

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