Well being care debt is a widespread drawback in america, garnering the eye of some policymakers and rising as a possible marketing campaign problem. 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. Almost three-quarters of adults say they’re fearful 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 offers medical health insurance protection to 66 million individuals, 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 will not be unusual and depart many uncovered to debt, with doubtlessly severe and long-lasting well being and monetary penalties.
Medicare provides protection for a variety of well being care providers, together with hospitalizations, doctor visits, prescribed drugs, and post-acute care, however Medicare beneficiaries usually 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, resembling dental, imaginative and prescient, and listening to care and long-term providers and helps. Medicare households additionally spend extra on well being care than different households and dedicate a bigger share of their family budgets to medical prices and premiums. Well being prices are a selected problem for the thousands and thousands of Medicare beneficiaries with restricted earnings and financial savings to soak up surprising well being or different bills. Lastly, older adults are extra doubtless than youthful populations to have cognitive impairments resembling Alzheimer’s Illness, which have been proven to contribute to a decline in credit score scores and monetary instability years earlier than the situation is identified.
This information notice examines findings from the KFF Well being Care Debt Survey to evaluate the prevalence, sources and penalties of well being care debt amongst Medicare-age adults.
Key Takeaways
A couple of in 5 US adults ages 65 and older (22%) reported having some type of debt in 2022 on account 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, giant shares say that a few of the payments that triggered their debt have been resulting from routine well being care providers resembling lab charges and diagnostic assessments (49%), dental care (48%), and visits to the physician (41%).
Almost three in ten Medicare-age adults with well being care debt (29%) say their family has been contacted by a set company up to now 5 years on account 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 options to wanted well being care or prescription drugs resulting from prices up to now 12 months.
In 2022, a couple of in 5 US adults ages 65 and older (22%) had some type of debt on account of medical or dental payments (Determine 1). That is roughly half the share discovered amongst adults ages 50 to 64 (44%), who will not be but eligible for Medicare primarily based on age. Decrease charges of well being care debt amongst older adults are doubtless due, partly, to just about common Medicare protection amongst individuals ages 65 and older. Moreover, most Medicare beneficiaries have some type of protection that limits their cost-sharing bills, resembling Medicare Benefit, or supplemental protection, resembling Medicaid, retiree well being advantages, or Medigap.
The speed of well being care debt amongst individuals 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 targeted 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 mates. For that reason, the KFF Well being Care Debt Survey offers a broad measure of well being care debt, which incorporates different varieties of debt incurred on account of medical or dental payments, in addition to money owed owed for the care of another person, resembling a baby, partner, or father or mother.
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 late or unable to be paid (8%), or have money owed owed to a financial institution, assortment company or different lender on account of loans used to repay medical or dental payments (7%). A smaller share report money owed owed to household and mates 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 scores.
Sources of well being care debt amongst older adults are various, and embrace many routine well being care wants (Determine 3). Almost half of Medicare-age adults with well being care debt say that a few of the payments that triggered 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 prescribed drugs. Dental care is among the main causes of well being care debt amongst Medicare-age adults, doubtless resulting from the truth that conventional Medicare doesn’t provide protection for dental care providers. (Most Medicare Benefit plans embrace some dental care protection, however the scope of protection varies extensively, and enrollees should 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, resembling the price of nursing dwelling care, assisted dwelling or full or close to full-time dwelling well being aides. These providers are used extensively by a comparatively small phase of the Medicare inhabitants however will be fairly pricey. For instance, in 2023, the median annual price of a personal room in a nursing dwelling was $116,800 and $288,288 for round the clock dwelling well being aide providers. These prices far exceed the median earnings ($36,000 per individual) and financial savings ($103,800 per individual) of the typical Medicare beneficiary in 2023. Medicare doesn’t usually cowl these providers, inserting 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 individuals dwelling in nursing properties, 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. Almost three in ten Medicare-age adults with well being care debt (29%) say their family has been contacted by a set company on account 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 tough to reverse, and may make it tougher to safe reasonably priced credit score sooner or later. The Shopper Monetary Safety Bureau just lately proposed a rule that will take away well being care payments from most credit score studies and prohibit lenders from making mortgage choices primarily based on medical info, 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%) up to now 5 years on account of their well being care debt (Determine 5). One in three have taken cash out of long-term financial savings accounts, resembling 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 resembling these can have severe penalties for monetary stability and normal wellbeing and should perpetuate the cycle of well being care debt by leaving older adults with fewer assets 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 options to wanted well being care or prescription drugs resulting from prices (Determine 6). Almost half (48%) of Medicare-age adults with well being care debt postponed getting well being care they wanted up to now 12 months, whereas two in 5 (43%) relied on dwelling treatments or over-the-counter medicine as a substitute of going to the physician, and one in three didn’t get a medical take a look at or therapy beneficial by a health care provider (31%) or took lower than the prescribed dose of a drugs by skipping doses, chopping drugs in half, or leaving the prescription unfilled (28%).
