Well being care debt is a widespread drawback in the US, garnering the attention of some policymakers and rising as a potential campaign issue. A 2022 KFF survey discovered that 2 in 5 US adults (41%) of all ages report some type of debt resulting from medical or dental payments for their very own or another person’s care. Nearly three-quarters of adults say they’re nervous about affording surprising medical payments or the price of well being care providers, larger than the shares who report worrying about affording different family bills. The Medicare program, which gives medical insurance protection to 66 million folks, most of whom are older adults ages 65 or older, helps to cowl the price of medical care for many who qualify, but well being care cost-related issues amongst Medicare-age adults are not uncommon and go away many exposed to debt, with probably critical and long-lasting well being and monetary penalties.
Medicare affords protection for a variety of well being care providers, together with hospitalizations, doctor visits, pharmaceuticals, and post-acute care, however Medicare beneficiaries typically pay out-of-pocket for his or her month-to-month premiums and deductibles, cost-sharing for Medicare-covered providers, and the price of providers not lined by Medicare, corresponding to dental, vision, and hearing care and long-term services and supports. Medicare households additionally spend extra on well being care than different households and devote a larger share of their household budgets to medical prices and premiums. Well being prices are a selected problem for the thousands and thousands of Medicare beneficiaries with limited income and savings to soak up surprising well being or different bills. Lastly, older adults are extra possible than youthful populations to have cognitive impairments corresponding to Alzheimer’s Illness, which have been shown to contribute to a decline in credit scores and financial instability years earlier than the situation is identified.
This information be aware examines findings from the KFF Health Care Debt Survey to evaluate the prevalence, sources and penalties of well being care debt amongst Medicare-age adults.
Key Takeaways
- Multiple in 5 US adults ages 65 and older (22%) reported having some type of debt in 2022 because of medical or dental payments for their very own or another person’s care, which is half the share reported amongst adults ages 50-64 (44%).
- Amongst Medicare-age adults with well being care debt, massive shares say that among the payments that precipitated their debt have been resulting from routine well being care providers corresponding to lab charges and diagnostic assessments (49%), dental care (48%), and visits to the physician (41%).
- Practically three in ten Medicare-age adults with well being care debt (29%) say their family has been contacted by a group company prior to now 5 years because of medical or dental payments, whereas one in 4 (23%) say that well being care debt has negatively affected their credit score rating.
- Three in 5 Medicare-age adults with well being care debt (62%) say that they, or one other member of their family, have delayed, skipped, or sought alternate options to wanted well being care or prescription medicines resulting from prices prior to now yr.
In 2022, multiple in 5 US adults ages 65 and older (22%) had some type of debt because of medical or dental payments (Determine 1). That is roughly half the share discovered amongst adults ages 50 to 64 (44%), who usually are not but eligible for Medicare based mostly on age. Decrease charges of well being care debt amongst older adults are possible due, partly, to almost common Medicare protection amongst folks ages 65 and older. Moreover, most Medicare beneficiaries have some form of coverage that limits their cost-sharing bills, corresponding to Medicare Benefit, or supplemental protection, corresponding to Medicaid, retiree well being advantages, or Medigap.
The speed of well being care debt amongst folks ages 65 and older is larger than reported by some others, principally due to methodological variations in the way in which well being care debt is outlined. Surveys of well being care debt within the US have generally centered on unpaid medical payments, or payments which have been despatched to collections, which can overlook the share of adults who repay their well being care payments by accumulating bank card debt, taking out loans, or borrowing from household and pals. For that reason, the KFF Well being Care Debt Survey gives a broad measure of health care debt, which incorporates different sorts of debt incurred because of medical or dental payments, in addition to money owed owed for the care of another person, corresponding to a toddler, partner, or dad or mum.
Many older adults repay their well being care payments by accumulating bank card debt or debt from different sources (Determine 2). Roughly one in ten Medicare-age adults report having medical or dental payments that they’re paying off over time on to a supplier (12%), placed on a bank card and are paying off over time (11%), are overdue or unable to be paid (8%), or have money owed owed to a financial institution, assortment company or different lender because of loans used to repay medical or dental payments (7%). A smaller share report money owed owed to household and pals for cash borrowed to repay medical or dental payments (3%).
Roughly two in 5 Medicare-age adults with well being care debt (39%) owe lower than $1,000, together with one in 5 (19%) who owe lower than $500, however one in ten Medicare-age adults with well being care debt (11%) owe $10,000 or extra (information not proven). Even comparatively small quantities of debt can contribute to a drop in credit score rankings.
Sources of well being care debt amongst older adults are diverse, and embrace many routine well being care wants (Determine 3). Practically half of Medicare-age adults with well being care debt say that among the payments that precipitated their debt have been resulting from lab charges and diagnostic assessments (49%), dental care (48%), and visits to the physician (41%). One in three (31%) attribute a portion of their debt to emergency care, and one in 4 (24%) to pharmaceuticals. Dental care is without doubt one of the main causes of well being care debt amongst Medicare-age adults, possible resulting from the truth that conventional Medicare does not offer coverage for dental care services. (Most Medicare Benefit plans embrace some dental care coverage, however the scope of protection varies broadly, and enrollees should still incur substantial out-of-pocket prices for these providers.)
Simply 6% of Medicare-age adults attribute a portion of their debt to payments for long-term care providers and helps, corresponding to the price of nursing residence care, assisted dwelling or full or close to full-time residence well being aides. These providers are used extensively by a comparatively small phase of the Medicare inhabitants however will be fairly expensive. For instance, in 2023, the median annual cost of a private room in a nursing home was $116,800 and $288,288 for round the clock residence well being aide providers. These prices far exceed the median earnings ($36,000 per individual) and financial savings ($103,800 per individual) of the average Medicare beneficiary in 2023. Medicare does not generally cover these providers, putting them out of attain for a lot of older adults and leaving some with substantial debt. (Survey findings could underrepresent the prices and related debt incurred by folks dwelling in nursing houses, assisted dwelling amenities and different institutional settings, although the survey does embrace debt related to long-term providers and helps if incurred by different relations.)
The monetary penalties of well being care debt could also be lasting. Practically three in ten Medicare-age adults with well being care debt (29%) say their family has been contacted by a group company because of medical or dental payments, whereas one in 4 (23%) say that well being care debt has negatively affected their credit score rating (Determine 4). For retirees with well being care debt, these penalties could also be troublesome to reverse, and may make it more difficult to safe reasonably priced credit score sooner or later. The Shopper Monetary Safety Bureau lately proposed a rule that might take away well being care payments from most credit score reviews and prohibit lenders from making mortgage selections based mostly on medical data, with the objective of decreasing the burden of well being care debt for US adults and safeguarding towards coercive credit score reporting practices.
Two in 5 Medicare-age adults with well being care debt report that they, or one other member of their family, have reduce spending on family requirements (42%) or used up a big portion of their financial savings (39%) prior to now 5 years because of their well being care debt (Determine 5). One in three have taken cash out of long-term financial savings accounts, corresponding to a retirement account (34%) or elevated their bank card debt for non-medical purchases (31%), and one in 5 have taken out a mortgage (21%) or skipped or delayed cost of different payments (18%). Sacrifices corresponding to these can have critical penalties for monetary stability and normal wellbeing and should perpetuate the cycle of well being care debt by leaving older adults with fewer sources for different wanted well being bills.
Three in 5 Medicare-age adults with well being care debt (62%) say that they, or one other member of their family, have delayed, skipped, or sought alternate options to wanted well being care or prescription medicines resulting from prices (Determine 6). Practically half (48%) of Medicare-age adults with well being care debt postponed getting well being care they wanted prior to now yr, whereas two in 5 (43%) relied on residence treatments or over-the-counter medicine as a substitute of going to the physician, and one in three didn’t get a medical check or remedy really helpful by a health care provider (31%) or took lower than the prescribed dose of a drugs by skipping doses, reducing capsules in half, or leaving the prescription unfilled (28%).
