Celebrate Medicare’s Anniversary By Improving Protections for Low-Income Beneficiaries
Today, July 30, we celebrate the 49th anniversary of one of the federal government’s most critical social insurance programs: Medicare. As the primary source of health coverage for 41 million older adults and 9 million people with disabilities, Medicare makes a huge difference in people’s lives and well-being. For the vast majority of beneficiaries, Medicare works well, and consumers are very satisfied with the health care they receive. But there is always room for improvement: Making it easier for low-income people to afford their out-of-pocket health care costs would make a good program even better.
Challenge: Low-income Medicare beneficiaries struggle with considerable out-of-pocket costs and chronic health conditions
Most people with Medicare have low to modest incomes—in 2013, half of all Medicare beneficiaries had incomes of less than $23,500 per year. For low-income beneficiaries, Medicare cost-sharing—such as copayments for doctor visits or prescriptions—can be a significant burden. For example, in 2010, Medicare households averaged $4,500 in health care expenses—nearly 15 percent of household spending, compared with only 5 percent for non-Medicare households.
People of color face even greater financial hurdles—in 2012, the median annual income was just more than $15,000 for black Medicare beneficiaries and just less than $14,000 for Hispanic beneficiaries. Additionally, almost half of all Medicare beneficiaries have three or more chronic conditions. This means frequent visits to the doctor, hospital stays, and multiple prescription drugs, which amount to high out-of-pocket costs.
Solution: Strengthen existing programs to help low-income Medicare beneficiaries
While programs exist to tackle the challenges facing low-income Medicare beneficiaries, they lag in enrollment and are limited in scope. These programs are:
- The three Medicare Savings Programs that help beneficiaries afford premiums and additional out-of-pocket costs
- The Part D low-income subsidy covers Medicare Part D premiums and lowers prescription drug copayments
Fortunately, there are a number of steps federal and state policymakers can take to improve the Medicare Savings Programs and the Part D low-income subsidy. We outlined four strategies to improve these programs at both the federal and state level in our issue brief released last month, Four Strategies for Improving Programs that Help Low-Income Medicare Beneficiaries with Health Care Costs.
Strategies for improving these programs include increasing income eligibility standards, modernizing asset limits, aligning eligibility criteria across programs, and improving cost-sharing protections within existing programs. (For an in-depth explanation of each strategy, see our brief.)
The four strategies are not mutually exclusive and they could be implemented in different combinations or separately from each other. This means there are plenty of ways for advocates to be involved in making Medicare work better for low-income beneficiaries.
Multiple paths to making Medicare work for low-income people
When President Lyndon B. Johnson signed the Medicare bill into law 49 years ago, he spoke of the financial burdens older people face:
“There are more than 18 million Americans over the age of 65. Most of them have low incomes. Most of them are threatened by illness and medical expenses that they cannot afford.”
Thanks to Medicare, there are fewer older Americans and people with disabilities who worry about “medical expenses they cannot afford.”
As we recognize Medicare’s anniversary, let’s commit to strengthening the program. There are multiple paths and strategies (both federal and state) available to advocates interested in helping Medicare work better for the low-income beneficiaries it serves. Policymakers at the state and federal level can honor this successful program and its most vulnerable beneficiaries by promoting improvements to the Medicare Savings Programs and Part D low-income subsidy.