Medicare Compliance & Reimbursement
Baby Boomers Buckle Under Crippling Health Care Costs
Industry experts fear that the current health care system might not support the millions of baby boomers who will soon reach retirement age--but many older adults who are not yet eligible for Medicare are already facing health care hardships, a recent survey reveals.
Rising out-of-pocket health care costs and sluggish wage growth threatens older adults' ability to save for retirement, the Commonwealth Fund study shows. Two out of three older adults say they're already worried they might not be able to afford necessary medical care in the future.
Age increases the risk for chronic conditions and, consequently, the need for health care. Among 50- to 64-year-old adults in working families, 62 percent already have at least one chronic condition, such as high blood pressure, arthritis or high cholesterol, the survey says.
Unstable, Inadequate Coverage Taxes Working Adults
"What's surprising is the instability of coverage across low and moderate incomes," says Sarah Collins, the study's lead author. "There is a sense of some risk and some high-cost burdens among both low- and moderate-income working households in this age group." Many older workers who need to manage chronic conditions find they need to get by on unstable health care coverage, the survey shows. One in five older adults is currently uninsured or has experienced unstable coverage since age 50. Low-income adults in particular--54 percent--have gone without health insurance coverage at some time in their lives.
"One thing that jumps out at me is the inadequacy of many of the insurance products being sold," notes Carol Pryor, senior policy analyst for The Access Project. "For people purchasing insurance on the individual market, their medical bill problems are really similar to people who are uninsured. Having these insurance policies is offering no protection at all."
Those older adults who don't receive health care coverage through their employer end up spending a substantial portion of their income on coverage and health care, according to the survey. Nearly half spend more than $3,600 per year on premiums and $1,000 or more on deductibles. Only 16 percent of older adults with employer-sponsored coverage spend the same amount on premiums, and half that many spend the same amount meeting deductibles. To make matters worse, more than one-third of older adults had a medical bill problem in the last 12 months or were paying off medical debt that they accrued.
Early Medicare Enrollment, HSAs Offer Greater Savings Potential
As older adults feel an increasing pinch from escalating health care costs, many are willing to set money aside in a health savings account. Seventy-one percent said they're interested in a 1-percent, tax-deferred earnings deduction that they could later use to pay for long-term care or other health services that Medicare does not cover. Early Medicare enrollment also saw significant support--72 percent said they would be very or somewhat interested in enrolling in Medicare before age 65.
To view the full report, go to www.cmwf.org/usr_doc/884_Collins_hlt_coverage_aging_baby_boomers.pdf.
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