Medicare may be the closest America gets to “socialized medicine,” but a new survey reveals just how far it falls short of comprehensive, universal coverage.
A stunning one-fifth of seniors on Medicare still count as “underinsured,” nearly a quarter are struggling to pay their premiums, and two seniors out of five admit they still can’t afford the healthcare they need, according to the survey from the Commonwealth Fund, a leading healthcare nonprofit.
And there seemed little if any difference across these measures between those on traditional Medicare and those on Medicare Advantage, the privatized system that now accounts for more than half the system.
The fund defined “underinsured” as someone whose health insurance still left them with out-of-pocket expenses over the past year equal to more than 10% of their income (or more than 5% for those whose incomes are less than twice the federal poverty level).
According to Commonwealth’s Survey, some 22% of Medicare Advantage customers were “underinsured” in this way. The figure for those on Medicare who also had supplemental “medigap” insurance was just 13%. But the figures need context. Medicare Advantage customers have lower average incomes than those on traditional Medicare, which is apt to drive up the underinsurance count.
Furthermore, the figure for those on Medicare without a supplemental plan was a staggering 33%.
America’s Health Insurance Plans, the trade association and lobbying organization for private health insurers, frequently point out that Medicare Advantage plans are increasingly popular with consumers, and have scored well in customer satisfaction in surveys.
The core message, says Commonwealth, is how many seniors are being left behind or are going without the medical care they need because of the gaps and coinsurance costs of Medicare.
“This shows overall that many people in Medicare Advantage and traditional Medicare are struggling with high healthcare expenses, particularly low-income people,” Gretchen Jacobson, the fund’s senior Medicare expert, told MarketWatch. “These high healthcare expenses are resulting in one (senior) in five not getting the dental care they need, and one in 10 not filling their prescriptions.”
She added: “We aren’t seeing significant differences by coverage type…between Medicare Advantage and traditional Medicare.”
The gaps and problems faced by many on Medicare, especially those on lower incomes, are in contrast to the rising costs of the system. The system is struggling with both rising healthcare costs and a rapidly growing number of seniors to cover.
The total cost of Medicare to the taxpayers has doubled in the past 15 years and quadrupled in the past 25, hitting $1 trillion this year for the first time. At the start of the millennium, Medicare consumed just over 2% of annual GDP. It is now nearly 4%, and the program’s trustees project it will rise to around 6% by 2040.
The trust fund financing Medicare Part A — hospital care — has a $4.4 trillion hole in its accounts and is expected to run out of money in 2031, the trustees report.
This is without even covering the cost of most nursing-home stays. The public thinks Medicare will pay if you end up in a home. It won’t.
It’s worth bearing all of this in mind as the politicians in Washington gear up to talk about trying to fix the program’s finances, as well as those of Social Security.