medicare: an overview
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Medicare: An OverviewSeptember 30, 2014Society for Financial and Professional Development7th Annual Financial Literacy Leadership Conference
Christina Swoope, MSPHPolicy Analyst, Program on Medicare PolicyKaiser Family Foundation
Exhibit 2
TV ads would have you believe that the typical older American looks something like this…
Exhibit 3
45%
31%
27%
20%
16%
13%
5%
NOTE: ADL is activity of daily living. SOURCE: Urban Institute and Kaiser Family Foundation analysis, 2013; Kaiser Family Foundation analysis of the Centers for Medicare & Medicaid Services Medicare Current Beneficiary Survey 2010 Cost and Use file.
Characteristics of the Medicare PopulationPercent of total Medicare population:
4+ Chronic Conditions
Cognitive/Mental Impairment
Fair/Poor Health
Functional Impairment(2+ ADL Limitations)
Under-65 Disabled
Age 85+
Long-term Care Facility Resident
Exhibit 4
Half of all Medicare beneficiaries had incomes below $23,500 per person in 2013
25% had incomes below $14,400
50% had incomes below $23,500
5% had incomes above $93,900
1% had incomes above $171,650
SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2013.
Exhibit 5
Half of all Medicare beneficiaries had savings below $61,400 per person in 2013
SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2013.
Savings include retirement account holdings (such as IRAs or 401Ks), savings accounts, bonds and stocks
50% had savings below $61,400
25% had savings below $11,300
50% had savings below $61,400
25% had savings below $11,300
50% had savings below $61,400
8% had $0 in savings or were in debt
25% had savings below $11,300
50% had savings below $61,400
5% had savings above $1,112,950
8% had $0 in savings or were in debt
25% had savings below $11,300
50% had savings below $61,400
5% had savings above $1,112,950
1% had savings above $3,423,800
8% had $0 in savings or were in debt
Exhibit 6
Half of all Medicare beneficiaries had home equity below $66,700 per person in 2013
25% had home equity below $12,250
50% had home equity below $66,700
5% had home equity above $398,500
1% had home equity above $799,850
SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2013.
21% had $0 in home equity
Exhibit 7
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$14,400 $16,400
$23,500 $28,250
$41,650
$51,000
$69,350
$84,100
$93,900
$111,900
NOTE: All incomes are adjusted to 2013 dollars.SOURCE: Urban Institute / Kaiser Family Foundation analysis, 2013.
Growth in per capita income is projected to be concentrated among beneficiaries with higher incomes
Per Capita Total Income (in 2013 dollars)
Year
50th percentile (Median)
25th percentile
75th percentile
90th percentile
95th percentile
2013 2015 2020 2025 2030
Exhibit 8
42%$1,989
18%
14%
11%
6%3%3%2%1%
NOTE: Analysis excludes beneficiaries enrolled in Medicare Advantage plans. Premiums includes Medicare Parts A and B and other types of health insurance beneficiaries may have (Medigap, employer-sponsored insurance, and other public and private sources).SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2010 Cost & Use file.
Premiums are a large share of average total out-of-pocket health care spending by Medicare beneficiaries; long-term care facility costs are the largest component of spending on services
Average Total Out-of-Pocket Spending on Services and Premiums, 2010: $4,734
Long-term care facility
Medical providers and supplies
Prescription drugs
DentalInpatient hospitalSkilled nursing facilityOutpatient hospitalHome health
Premiums Services
Distribution of Average Total Out-of-Pocket Spending on Services and Premiums by Medicare Beneficiaries, 2010
Exhibit 9
All bene-ficiaries
Men Women Under 65 65-74 75-84 85+
$1,989 $1,879 $2,080 $948
$2,093 $2,369 $2,229
$2,744 $2,485 $2,956
$2,059
$1,926
$2,876
$5,962 $4,734 $4,363
$5,036
$3,007
$4,020
$5,245
$8,191
ServicesPremiums
NOTE: Analysis excludes beneficiaries enrolled in Medicare Advantage plans. Premiums includes Medicare Parts A and B and other types of health insurance beneficiaries may have (Medigap, employer-sponsored insurance, and other public and private sources).SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2010 Cost & Use file.
Average out-of-pocket spending on services is higher for women on Medicare than men and increases with beneficiaries’ age
Share of beneficiaries 100% 45% 55% 17% 43% 27% 13%
AgeGender
Medicare Beneficiaries’ Average Total Out-of-Pocket Spending on Services and Premiums, by Gender and Age, 2010
Exhibit 10
Housing16975.88
789232.0%
9660.2655154
18.2%
2771.86148
545.2%
Food7890.427
785814.9%Other
15701.64814329.6%
Housing $11,673*
34.3%
$5,087* 15.0% Health Care
$4,722* 13.9%*
Food $5,189*
15.3%Other $7,321* 21.5%*
NOTE: *Estimate statistically significantly different from the non-Medicare household estimate at the 95 percent confidence level. SOURCE: Kaiser Family Foundation analysis of the Bureau of Labor Statistics Consumer Expenditure Survey Interview and Expense Files, 2012.
Even with Medicare and supplemental coverage, Medicare households spent far more than others on health expenses in 2012
TransportationTransportation
Health Care
Non-Medicare Household SpendingMedicare Household Spending
Average Household Spending = $53,000
Average Household Spending = $33,993*
Exhibit 11
SOURCE: Kaiser Family Foundation illustration of 2014 Income-Related Medicare Part B Premiums. Share of Part B beneficiaries from Urban institute analysis of DYNASIM for the Kaiser Family Foundation.
Overview of Medicare Part B Premiums Under Current Law
My income is.. Less than $85,000
$85,001 - $107,000
$107,001 - $160,000
$160,001 - $214,000
More than $214,000
My monthly Part B premium in 2014 is…
Share of program costs paid by beneficiaries
25% 35% 50% 65% 80%
Share of Part B beneficiaries in this income level
95% 2% 2% < 1% < 1% .
$105 $336$147 $210 $273
Exhibit 12
Employer-Sponsored31%
Medicare Advantage
22%
Medigap15%
Medicaid17%
Other Public/Private1%
14%
SOURCE: Kaiser Family Foundation analysis of the Centers for Medicare & Medicaid Services Medicare Current Beneficiary 2010 Cost and Use file.
Most Medicare beneficiaries have some source of supplemental coverage, 2010
Total Number of Beneficiaries, 2010: 48.4 Million
No Supplemental Coverage
Exhibit 13
Medicare Beneficiaries have many plans to choose from
Part D Stand Alone Prescription Drug Plans
+
Medicare Advantage
Traditional Medicare
Employer Sponsored
MedicaidMedigapNo Supplemental
PPOHMO PrivateFFS
Plan Choice
Exhibit 14
NOTES: *You may have to pay a higher premium for late enrollment in Part A and/or a higher premium for late enrollment in Part B.SOURCE: Centers for Medicare and Medicaid Services, Medicare and You Handbook, 2014
Important Dates and Deadlines
3 Months3 MonthsInitial Enrollment PeriodEnroll within 3 months of the month of your 65th birthday.*
15October
7December
Open Enrollment
Open Enrollment PeriodReevaluate your health or drug plan annually and make any necessary changes
General Enrollment PeriodEnroll now if you did not whenyou were first eligible.* 1
January
31March
General Enrollment
Birthday Month
Special Enrollment PeriodSign up for Part A and/or Part B the month after your employment or group health plan insurance ends
8 Months
Ex: June, July, August October, November, December
September
Exhibit 15
Very Im-portant54%Somewhat
Important23%
Not too Important12%
Not at all Important10%
SOURCE: Kaiser Family Foundation/Robert Wood Johnson Foundation/Harvard School of Public Health, The Public’s Health Care Agenda for the 113th Congress (conducted January 3-9, 2013)
Medicare is personally important to the majority of the publicHow important is Medicare for you and for your family?
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