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Older Adults Struggle to Pay Medical Bills Even With Insurance

Prescription drug prices, out-of-pocket services are causing financial stress

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Many older Americans struggle to pay their medical bills, even with public and private insurance systems in place, a new report from the Centers for Disease Control and Prevention (CDC) shows.

The families of more than 12 percent of adults 65 and older, either with both Medicare and Medicaid or with Medicare only, had problems paying for health-related costs in 2018, the most recent data available for the report. Those with expanded insurance programs also found medical bills to be a burden. More than 8 percent of adults 65 and older with Medicare Advantage plans and more than 5 percent with private insurance say their families struggled to pay their health care expenses.

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One reason older Americans are having trouble paying health-related bills boils down to high prescription drug prices, says Gerard Anderson, a professor of health policy and management at Johns Hopkins Bloomberg School of Public Health.

"A drug that costs $20,000 or $30,000 might have an out-of-pocket cost for a Medicare beneficiary of $2,000 to $4,000, which is a significant portion of their Social Security income,” he explains.

An AARP report found the average annual cost for widely used prescription drugs used to treat chronic conditions was nearly $20,000 in 2017. And prices for widely used prescription drugs consistently increased faster than general inflation every year from 2006 to 2017, according to the AARP Public Policy Institute.

A host of uncovered services ranging from home care to long-term care can also add financial strain. And gaps in Medicare coverage leave many beneficiaries on the hook for dental and vision costs, explains Benjamin Sommers, a professor of health policy and economics at Harvard T. H. Chan School of Public Health. These gaps, combined with Medicare's 20 percent coinsurance, can “leave people financially at risk” when they need to access certain services, Sommers says.

"If you're dependent on Social Security and health care represents 10 percent or more of your total income, you're going to have to make some very difficult choices with respect to where you can live, what kind of foods you can eat and other sorts of essential services,” Anderson adds.

Younger populations are also struggling to pay for health care. The CDC report finds that 15.1 percent of people ages 18-64 have problems paying medical bills. Overall, however, the percentage of people whose families have problems paying medical bills has declined since 2011. Experts say expanding public and private health coverage should help to continue to drive the numbers down.

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