Can You Afford To Spend More On Healthcare?

Can You Afford To Spend More On Healthcare?

Mary Johnson, Editor

I recently assisted a friend who was extremely anxious about the cost of enrolling in Medicare. Part of her anxiety was caused by a bad experience with Obamacare coverage last year. Although her health plan’s month premium after subsidy was only $17, the deductible was more than she could afford to pay — $5,000. Her Social Security benefit is about $850 a month and her other income is very limited. Needing seven prescription meds, she found herself back at the local “free clinic” enrolled in numerous pharmacy assistance programs.

My friend learned she qualified for Medicare’s “Extra Help” program and, with my help using the Medicare Drug Plan Finder, she enrolled in a Medicare Advantage plan for just $17 a month that had no deductible that started the beginning of this year. The estimated cost of her prescriptions is less than she paid through the pharmacy assistance programs last year. Her income is also low enough to qualify for a Medicare Savings Program. The state of Virginia will cover her Part B premiums so that the $104.90 per month won’t be automatically deducted from her monthly Social Security payment. We were both sobbing in relief when she completed enrollment.

How affordable are your healthcare costs? Last year, the majority of people responding to the TSCL 2014 Senior Survey —58 percent — said they spent between 11 to 33 percent of their monthly Social Security benefits on premiums, deductibles, co-pays, and uncovered costs. Another 29 percent said they spent one-third or more of their Social Security on those expenses. With the average Social Security retirement benefit just $1,200, few can afford to pay a bigger share of the cost than they do now. Yet Congress is considering Medicare proposals that would shift more costs to beneficiaries.

National studies indicate that people with high deductibles and out-of-pocket costs tend to use less medical services, thus cutting government spending on healthcare. Medicare does need fixing, but not by making out-of-pocket costs so high that people can’t afford medically necessary care and prescriptions. Congress needs to do more to clamp down on fraud, waste and abuse. Medicare is the government benefit program having the highest financial loss due to improper payments, about $58 billion in fiscal 2013 alone. TSCL supports legislation that would provide more timely and stronger enforcement measures.


Sources: “Improper Payments: Government-wide Estimates And Reduction Strategies,” Government Accountability Office, July 9, 2014.