Trends in out-of-pocket healthcare costs among older community-dwelling Medicare beneficiaries

Abstract

Objective: To describe trends in out-of-pocket healthcare costs, including insurance premiums, for older Medicare beneficiaries living in the community.

Study design: Medicare Current Beneficiary Survey data were analyzed for community-dwelling beneficiaries 65 years or older between 1992 and 2004.

Methods: The primary focus of the analysis was out-of-pocket healthcare costs and out-of-pocket costs as a percentage of income. Descriptive statistics are presented for 1992, 1996, 2000, and 2004.

Results: Inflation-adjusted median out-of-pocket costs were stable between 1992 and 2000 and then rose by 21.7% between 2000 and 2004. Median costs as a percentage of income declined between 1992 and 1996 but increased from 12.6% in 2000 to 15.5% in 2004. Between 1992 and 2004, out-of-pocket costs increased fastest at the upper percentiles of the distribution. High out-of-pocket costs tended to persist from year to year, exacerbating the financial burden for some beneficiaries.

Conclusions: Following a period of declining burden between 1992 and 1996, out-of-pocket healthcare costs rose significantly between 2000 and 2004, increasing the financial burden for many older Medicare beneficiaries. These data provide a baseline for evaluating Medicare reform proposals that affect beneficiary spending.