The Kaiser Family Foundation has a new report that underscores the likelihood of significant access to care issues in Medicare Advantage for people with modest incomes and people in fair or poor health. More people in Medicare Advantage are likely to face challenges affording needed care than people in traditional Medicare with supplemental coverage. To improve and strengthen Medicare, Congress must ensure that out-of-pocket costs are not a barrier to care for older and disabled Americans.
Medicare Advantage plans have done a great job of enlisting people to join their ranks. Many people opt for Medicare Advantage over traditional Medicare because Medicare Advantage has an out-of-pocket cap, albeit one that can be as high as $7,550. Because traditional Medicare does not have an out-of-pocket cap, to protect yourself from astronomical out-of-pocket costs, you need to buy a Medigap policy or retiree coverage, or you need Medicaid.
More people with low incomes choose Medicare Advantage over traditional Medicare, including more Black people and more Hispanic people because it has an out-of-pocket cap. But, overall, more people report cost-related problems in Medicare Advantage than in traditional Medicare because traditional Medicare with supplemental coverage minimizes people’s out-of-pocket costs. The nearly six million people in traditional Medicare without supplemental coverage experience the highest rate of problems related to out-of-pocket costs.
Black people enrolled in traditional Medicare with some form of supplemental coverage, be it Medigap, retiree coverage or Medicaid, had fewer cost issues relating to their care than Black people in Medicare Advantage. Nearly one in three (32 percent) Black people enrolled in Medicare Advantage, said they had cost-related problems as compared with around one in four of them in traditional Medicare (24 percent).
More than one in four (28 percent) of Black people living in their communities faced cost-related problems. That is twice the rate of White people experience cost-related problems (14 percent). And, cost problems were 50 percent greater for Hispanic people living at home–21 percent–than White people–14 percent. People with incomes of $40,000 or more had the fewest cost-related issues–eight percent.
Overall, people in traditional Medicare with supplemental coverage had fewer cost-related problems than people in Medicare Advantage, 12 percent v. 19 percent. But, 30 percent of people in traditional Medicare without supplemental coverage, about 1.5 million people with Medicare, had cost-related problems. About 22 percent of Black people in traditional Medicare lack supplemental coverage, almost 50 percent more than White people, 15 percent of whom lack supplemental coverage.
People who report themselves to have fair or poor health had lower rates of cost problems in traditional Medicare than in Medicare Advantage, 31 percent v. 39 percent. Cost-related problems are most grave for Black Americans in fair or poor health, who are enrolled in Medicare Advantage. Half of them faced cost-related problems. By comparison, one-third of people in traditional Medicare who report themselves to have fair or poor health faced cost-related problems. People in traditional Medicare with supplemental coverage who report themselves in fair or poor health had the lowest rate of cost-related problems, though still considerable. More than one in four of them (27 percent) had cost-related problems.
The Kaiser Family Foundation does not define “cost-related problems.” But, whatever form they take, they present a barrier to care. People skip care because of cost or they get care and then struggle to make ends meet, leading them to think twice before they next get care.
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