Seniors struggling with out-of-pocket costs, report finds

NEWS IN BRIEF — Posted July 18, 2011

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Out-of-pocket spending on health care is expected to make up at least a quarter of most Medicare patients' personal budgets by 2020, according to a June study by the Kaiser Family Foundation.

The data analysis accompanied a report, "Living Close to the Edge," profiling how 16 Medicare patients manage their finances for health care. Health spending ranged from 4% to 59% of each senior's budget. For instance, a 78-year-old Utah woman spends 29% of her annual income of about $24,000 on health care and premiums.

Median out-of-pocket health spending for Medicare patients has risen steadily since 1997, researchers found. Spending on premium and other health costs has increased to 16.2% in 2006, up from 11.9% in 1997. Median cost-sharing for health care is projected to increase to 26% by 2020.

"As policymakers consider options to rein in federal spending, including proposals that would increase costs for some or all people on Medicare, this analysis raises important questions about how much -- and how much more -- of their incomes Medicare beneficiaries can reasonably be expected to spend on their health care," the study said.

Half of all Medicare patients had incomes below $22,000 in 2010, the report said. A quarter of all patients earn less than $13,000 per year, and less than 1% had incomes above $250,000. The report is available online (link).

Note: This item originally appeared at

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