HealthSCOUT: Watching the Medical World for News About You

April 6, 2000

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MONDAY, March 13 (HealthSCOUT) -- America's sickest and poorest senior citizens should receive any new medical benefits the government may decide to dole out, says the author of a new study on health-care costs.

They're the ones who need care the most, the ones who can least afford it and the ones who face the highest out-of-pocket expenses for medical care, the study says.

"The current system provides the best protection for wealthier people," says Crystal, chairman of the division on aging of the Institute for Health, Health Care Policy and Aging

Research at Rutgers University in New Jersey. "Anecdotally, we know there are people choosing between their blood pressure medicine and eating. We really have no safety net for them."

Despite $217 billion in Medicare expenditures in 1998, elderly Americans spent an average of 19 percent of their total annual income on out-of-pocket medical expenses, or about $1,986, according to Crystal's research. Out-of-pocket expenses include health insurance premiums, medical co-payments and prescriptions -- and more than half of that money went to pay for prescription drugs and dental care, the study says.

The numbers are even more startling among the poor elderly, Crystal says. Families who made no more than $6,720 a year spent 32 percent of their income on medical costs, or about $1,234, he says. Those who made the most paid less than 9 percent of their income, or about $2,424, on health care. "The first priority has to be the people most heavily burdened," Crystal says. He hopes his research will influence policy-makers debating who should qualify for Medicare prescription drugs benefits and how much should be covered. President Clinton has proposed offering an optional, limited drug benefit to all 39 million Medicare beneficiaries.

The study, which appears in the current issue of the Journal of Gerontology: Social Sciences, is based on data from the 1995 Medicare Current Beneficiary Survey.

Other vulnerable groups, according to the Rutgers study, include:

People who say they're in "poor" health, who spend 29 percent of their income on medical care compared with 15 percent for those in "excellent" health;

People 85 and older, who pay 22 percent of their income for health care vs. those 65 to 74, who pay 17 percent;

People who did not complete high school, who spend 21 percent of their annual income compared with 12 percent spent by college graduates.

Prescription medicines account for about 34 percent of the elderly's overall out-of-pocket medical bills, the research indicates. The share is even higher -- 40 percent -- for families making less than $9,384 a year. Medicare does not cover most outpatient prescription drug costs. Dental care, which is not covered by Medicare and rarely covered by private insurance plans, accounted for 18 percent of the elderly's out-of-pocket expenses, the study says.

The type of insurance coverage an elderly person has also affects the cost burden. The researchers found that those who purchased supplemental insurance individually spent 26 percent of their total income on health care while people with employer-sponsored coverage spent 16 percent. Those with Medicaid spent only about 8.4 percent on out-of-pocket medical expenses.

Expanding supplemental coverage through Medicaid could help fill the gaps for low-income elderly, Crystal says. However, he opposes a voucher system because he says it would do little to alleviate the out-of-pocket expenses for the most vulnerable elderly. What To Do

Previous HealthSCOUT articles have reported on a similar study of medical costs, done by the American Association of Retired Persons and on the American presidential candidates' health-care proposals.

To learn about Medicare benefits you might qualify for and how to receive them, visit the federal government's Web site at Medicare.

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Last updated 03/13/00

This article can be accessed directly at:

http://www.healthscout.com/cgi-bin/WebObjects/Af?ap=1 & id=92208

"We know there are people choosing

between their blood pressure medicine and eating. We really have no safety net for them."-- Crystal, Rutgers University

SOURCES: Interview with Crystal, chairman, division on aging, Institute for Health, Health Care Policy and Aging Research, Rutgers University, Newark, N.J.; January 2000 Journal of Gerontology: Social Sciences

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