Color of Money: The trend for seniors' health care costs will make you sick to your stomach
The projection that by 2030 out-of-pocket costs could rise to 50 percent of the average Social Security check is heart-stopping.
Even when researchers included all income, the percentage of people's money devoted to health expenses not covered by Medicare or other insurance was significant for recipients with relatively low incomes, who aren't likely to have a pension or other savings and investments and therefore rely mostly on Social Security.
Between 2013 and 2030, the median out-of-pocket health care spending burden for beneficiaries in traditional Medicare is projected to increase from 14 percent to 17 percent of their total income. This is a modest jump yet doesn't reflect the full story.
"I think some people have the impression that people on Medicare are relatively wealthy and many are healthy and that, as baby boomers come on Medicare, this is just not going to be an issue," Neuman said. "So, I think this is myth-busting. Because, even if there is a segment of the Medicare population that is healthy and a segment that is wealthy, there are many people who are struggling to make ends meet and paying a chunk of their limited income on health expenses."
Kaiser based its projections on current law, assuming no changes in Medicare policies that would affect out-of-pocket costs and no changes to Social Security and tax policy that would impact retirement income between 2013 and 2030. The group said its analysis for 2030 was based on nominal health care costs growing at an average annual rate of 4.3 percent.
This report provides a significant look at the magnitude of Medicare beneficiaries' out-of-pocket spending. What if policy-makers try to shift more costs onto them?
"It's only a matter of time before lawmakers circle back to the federal deficit and options to reduce federal spending, and when they do, we think Medicare will be on the table," Neuman said. "This report shows just what the burden already is today in the absence of any program cuts."
Neuman will be joining me on Feb. 1 at noon for a live chat at washingtonpost.com to discuss this report.
What we know for sure is that health care costs are not trending down. So, it's vital that any change in policy consider the struggle many seniors are having now to pay for their health care.
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