Medicare

The Consequential Costs of Medicare

President Lyndon B. Johnson first signed Medicare into law in 1965, and 19 million Americans rushed to enroll in the program. The original Medicare program only had two parts, A and B, that resemble today’s parts A and B. The monthly cost for a Part B premium at the time was $3.

Today it is $170.10, and over 60 million Americans are now enrolled in Medicare. At its heart, Medicare aims to protect and cover the healthcare needs of Americans in retirement, but rising costs of the program is placing financial stress on older adults.

According to Fidelity Investments’ 2022 annual analysis, a healthy male-female couple who retires at age 65 could expect to spend $315,000 on healthcare expenses in retirement.

That $315,000 total does not cover dental insurance, basic vision, over-the-counter medicines, or long-term care, raising the total savings needed. Nearly 94% of adults aged 65 and older are covered by Medicare, but spend almost twice as much on healthcare costs when compared to the general population.

Stress and well-being

At least two-thirds of older Americans consider healthcare costs to be a minor financial burden. Medicare can be stressful and expensive, leading to tradeoffs in spending that put individuals’ health in jeopardy.

Some older adults might need to sacrifice savings in other areas to prioritize healthcare costs. Juggling clothing, food, utilities, over-the-counter drugs, and gas costs, on top of lofty Medicare costs, leads to financial strain. Some individuals even sacrifice surgeries that would reduce pain, due to the high cost of hospital co-pays.

Stress from healthcare costs and postponed or cancelled medical procedures adds up, and ironically, it could negatively affect an individual’s health. Generally, stress has been linked to headaches, chest pains, muscle pains, fatigue, sleeping problems, and more. Stress is also known to cause changes in mood and behavior that do not support a healthy lifestyle.

With individuals needing healthcare services to reduce stress, but not being able to afford said services, a paradox emerges that requires attention from policymakers and industry professionals to promote health and longevity for everyone.

Late-life care approaches

As reported in a July 2020 press release from Stanford Medicine, Francesca Rinaldo – then a fellow at Stanford’s Clinical Excellence Research Center – and her colleagues set out to improve healthcare for older adults while saving them money. A comprehensive review, compiled by the team, found that social support and rehabilitative services that aren’t typically considered “healthcare,” could be most beneficial for improving older adults’ health while lowering healthcare costs.

To support these findings, the team conducted a study consisting of healthy, well-functioning older adults who visited their ill peers who had recently been hospitalized.

Simply by introducing companionship between peers, 30-day hospital readmission rates dropped by 25% in those sick older adults. Additionally, the team found a Johns Hopkins model, called CAPABLE, that sent nurses, occupational therapists, and home repair specialists into older adults’ homes to support aging in place. The program resulted in less spending on hospitalization and long-term services. Rinaldo and colleagues believe that broader implementation of a similar program could reduce Medicare spending by $29.1 billion annually.

These programs target late-life care for older adults, rather than end-of-life care. The latter considers an individual’s last few months of life, whereas the former starts at least one to three years before that.

Preventative approaches to late-life care are nontraditional in the healthcare industry; though with the number of adults aged 65 and older continually increasing each year, out of the box thinking is needed to ensure that older adults are receiving the care that they need without sacrificing basic survival needs.

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ABOUT THE AUTHOR

Grace Weintrob is a senior majoring in Communication Studies with a minor in Stage, Sports, and Film Production at CSU. She is currently working as the digital media intern for the Columbine Health Systems Center for Healthy Aging.

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