• The costs of expanding health care coverage for people under 65 may help save Medicare money in the future, finds a new Harvard study.
• People between ages 51 and 64 who don’t have insurance incur higher health care costs once they become eligible for Medicare than those who had insurance.
A new study from Harvard Medical School finds that adults who have been continuously covered by insurance between the ages of 51 and 64 spend about $1,000 less per year on health care after they become eligible for Medicare at age 65 than those who have had intermittent health insurance or none at all.
J. Michael McWilliams, M.D., assistant professor of health care policy at Harvard Medical School, and his colleagues looked at results from the Health and Retirement Study, an earlier national survey of health coverage. They identified two groups: 2,951 adults who had continuous insurance and 1,616 adults who had intermittent or no insurance. Then the researchers analyzed Medicare claims for the two groups.
The findings: Those who lacked coverage cost the Medicare system an additional $1,000 each annually when compared with those who had health insurance all along. Much of the spending difference was explained by hospitalizations for complications related to cardiovascular disease or diabetes, chronic conditions that are very treatable before age 65. Uninsured adults were also more likely to delay elective surgery—such as joint replacement—until joining Medicare.
In other words, uninsured people waited to get care for chronic conditions and postponed surgeries until they had Medicare coverage.
“These findings have quite important policy implications,” says McWilliams. When policymakers calculate the cost of covering the uninsured, they focus on the expected increase in health care costs once people have insurance, says McWilliams, but cost savings from health benefits are often ignored. Better coverage and better care earlier in life mean fewer expensive treatments later. The estimated cost of increased coverage for uninsured adults between the ages of 51 and 64 is $197 billion, but study authors say that coverage would potentially reduce subsequent Medicare spending by $98 billion.
Not everyone agrees with the findings. “There’s certainly going to be some savings,” says Jay Bhattacharya, M.D., a research fellow at the National Bureau of Economic Research and a health economist. “I would love to believe the number is as large as they estimate, but I doubt it.”
The study appeared in the Oct. 6 online edition of the Annals of Internal Medicine and was funded by the Commonwealth Fund, a private foundation supporting independent research on health policy reform.
Cathie Gandel is a freelance writer based in New York.