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Figure.  Health Care Spending Rates by Age From 2014 Through 2018
Health Care Spending Rates by Age From 2014 Through 2018

A and B, Data are from the Medical Expenditure Panel Survey. Lines represent second-order polynomial best-fit curves of data for respondents aged 57 to 64 years and aged 66 to 73 years (blue circles). Data for age 65 years (orange circles) are excluded because that information consists of respondents who were aged 64 years for 1 to 11 months of the recall period. Amounts illustrated in panel A have been converted to 2018 US dollars.

Table.  Insurance Coverage and Affordability Measures Before and After Medicare Eligibility at Age 65 Yearsa
Insurance Coverage and Affordability Measures Before and After Medicare Eligibility at Age 65 Yearsa
1.
Wallace  J, Song  Z.  Traditional Medicare versus private insurance: how spending, volume, and price change at age sixty-five.   Health Aff (Millwood). 2016;35(5):864-872. doi:10.1377/hlthaff.2015.1195PubMedGoogle ScholarCrossref
2.
Card  D, Dobkin  C, Maestas  N.  Does Medicare save lives?   Q J Econ. 2009;124(2):597-636. doi:10.1162/qjec.2009.124.2.597PubMedGoogle ScholarCrossref
3.
Xu  K, Evans  DB, Carrin  G, Aguilar-Rivera  AM, Musgrove  P, Evans  T.  Protecting households from catastrophic health spending.   Health Aff (Millwood). 2007;26(4):972-983. doi:10.1377/hlthaff.26.4.972PubMedGoogle ScholarCrossref
4.
Liu  C, Chhabra  KR, Scott  JW.  Catastrophic health expenditures across insurance types and incomes before and after the Patient Protection and Affordable Care Act.   JAMA Netw Open. 2020;3(9):e2017696. doi:10.1001/jamanetworkopen.2020.17696PubMedGoogle Scholar
5.
Jacobs  PD.  The impact of Medicare on access to and affordability of health care.   Health Aff (Millwood). 2021;40(2):266-273. doi:10.1377/hlthaff.2020.00940PubMedGoogle ScholarCrossref
6.
McWilliams  JM, Meara  E, Zaslavsky  AM, Ayanian  JZ.  Use of health services by previously uninsured Medicare beneficiaries.   N Engl J Med. 2007;357(2):143-153. doi:10.1056/NEJMsa067712PubMedGoogle ScholarCrossref
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    Views 1,229
    Research Letter
    September 10, 2021

    Changes in Out-of-Pocket Spending and Catastrophic Health Care Expenditures Associated With Medicare Eligibility

    Author Affiliations
    • 1Department of Surgery, University of Michigan Medical School, Ann Arbor
    • 2National Clinician Scholars Program, University of Michigan, Ann Arbor
    • 3Division of General Medicine, University of Michigan Medical School, Ann Arbor
    • 4Institute for Healthcare Policy and Innovation, University of Michigan, Ann Arbor
    • 5Editor, JAMA Health Forum
    JAMA Health Forum. 2021;2(9):e212531. doi:10.1001/jamahealthforum.2021.2531
    Introduction

    Despite large gains in health insurance coverage after the Patient Protection and Affordable Care Act, adults younger than 65 years remain at substantial financial risk because of high out-of-pocket (OOP) costs for health care.1 However, the gains in financial risk protection associated with Medicare, which covers 60 million elderly and disabled adults, remain incompletely understood. In this study, we assessed the association between gaining Medicare eligibility and OOP health care spending and catastrophic health care expenditure (CHE) risk.

    Methods

    This cross-sectional study followed the Strengthening the Reporting of Observational Studies in Epidemiology (STROBE) reporting guideline. The institutional review board of the University of Michigan deemed the study exempt from review and waived the requirement for informed consent because we used deidentified publicly available data from the Medical Expenditure Panel Survey for 2014 through 2018. The study cohort included all individuals aged 57 to 73 years who reported any health care charges in the previous 12 months. Following previous work,1,2 we used a second-order local polynomial regression discontinuity design to evaluate changes associated with Medicare eligibility at age 65 years. Outcomes included insurance coverage (any Medicaid, Medicare, any private or uninsured), mean annual income, mean annual medical charges, mean annual OOP health care spending (exclusive of premiums), CHE (defined as OOP spending ≥40% of annual income minus spending on food and housing),3,4 and delaying care because of affordability.

    Because measured and unmeasured confounders should be balanced on either side of the age threshold, regression discontinuity estimates the isolated association between Medicare age eligibility and financial outcomes. The regression discontinuity analyses were limited to the 8 years preceding (ages 57-64) and the 8 years following (ages 66-73) the year that a patient becomes eligible for Medicare. We also ran sensitivity analyses using a first-order polynomial design, alternative age bandwidth choices, and excluding ages 64 to 66 years. Spending data were standardized to 2018 US dollars. Analyses were conducted from March 15 to June 28, 2021, using Stata, version 15.1 (StataCorp, LLC) and Medical Expenditure Panel Survey weights that accounted for the complex survey design. A 2-sided P < .05 was considered to be significant.

    Results

    Among the 24 700 survey respondents aged 57 to 73 years, 91.7% incurred medical charges during the years surveyed (weighted 274 million person-years). The Figure shows the mean OOP health care spending and CHE rate by age. The Table provides mean results for key outcomes among respondents aged 64 years and 66 years. Notably, 8.6% of adults aged 64 years experienced CHE. Regression discontinuity analyses showed a −4.9 (95% CI, −5.3 to −4.6) percentage-point reduction in the uninsured rate. Despite a 5% increase in medical charges ($1194; 95% CI, $271-$2117) after age 65 years, OOP spending decreased by 27% (−$383; 95% CI, −$512 to −$254), and the CHE rate decreased by 35% (−3.0 [95% CI, −3.8 to −2.2] percentage points) (Table). The Table shows changes in OOP spending by type. Affordability-related delays in care decreased by 1.1 (95% CI, −1.6 to −0.8) percentage points. All 3 sensitivity analyses yielded similar results.

    Discussion

    We found that becoming eligible for Medicare at age 65 years was associated with a 27% reduction in OOP spending and a 35% reduction in the risk of catastrophic health care expenditures for older adults from 2014 through 2018. These findings extend those of previous work4-6 by quantifying the type of spending changes and magnitude of financial risk protection currently associated with Medicare. Despite the substantial health insurance coverage gains attributable to the Affordable Care Act, nearly 9% of adults aged 64 years still experienced CHE from 2014 through 2018. Interpretation of our results is subject to the limitations common to all observational data, namely the inability to demonstrate causal influence.

    The substantial declines in OOP spending and the catastrophic spending rate that occur at age 65 years show the important role that Medicare plays in improving financial risk protection for older adults. The importance of improved financial risk protection is further supported by the substantial decline in delaying care because of cost or affordability. Taken together, these findings suggest that lowering the Medicare eligibility age may provide substantial benefit by mitigating financial strain and delays in care associated with unaffordable and burdensome health care expenses.

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    Article Information

    Accepted for Publication: July 15, 2021.

    Published: September 10, 2021. doi:10.1001/jamahealthforum.2021.2531

    Open Access: This is an open access article distributed under the terms of the CC-BY License. © 2021 Scott JW et al. JAMA Health Forum.

    Corresponding Author: John W. Scott, MD, MPH, Department of Surgery, University of Michigan, 1500 E Medical Center Dr, University Hospital-1C421, Ann Arbor, MI 48109-5033 (jwsco@med.umich.edu).

    Author Contributions: Dr Scott had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.

    Concept and design: Scott, Tipirneni, Ayanian.

    Acquisition, analysis, or interpretation of data: All authors.

    Drafting of the manuscript: Scott, Neiman.

    Critical revision of the manuscript for important intellectual content: All authors.

    Statistical analysis: Scott, Neiman, Fan.

    Administrative, technical, or material support: Scott.

    Conflict of Interest Disclosures: Dr Neiman reported receiving salary funding through the National Clinician Scholars Program at the University of Michigan. Dr Tipirneni reported receiving speaker fees from the American Neurological Association and the Muribushi Project for Okinawa Residency Programs; support from the Clinical Scientist Development Award from the National Institute on Aging; and serves as a member of the University of Michigan Institute for Healthcare Policy and Innovation team conducting the evaluation required by the Centers for Medicare & Medicaid Services of the Health Michigan Plan under contract with the Michigan Department of Health and Human Services. Dr Ayanian reported receiving grants from the Michigan Department of Health and Human Services and National Library of Medicine; personal fees from JAMA Network, New England Journal of Medicine, Harvard University, University of Massachusetts Medical School, and University of Chicago; and nonfinancial support from the National Institutes of Health, National Academy of Medicine, and AcademyHealth. No other disclosures were reported.

    Disclaimer: Dr Ayanian, Editor of JAMA Health Forum, was not involved in the editorial review or decision for this article.

    References
    1.
    Wallace  J, Song  Z.  Traditional Medicare versus private insurance: how spending, volume, and price change at age sixty-five.   Health Aff (Millwood). 2016;35(5):864-872. doi:10.1377/hlthaff.2015.1195PubMedGoogle ScholarCrossref
    2.
    Card  D, Dobkin  C, Maestas  N.  Does Medicare save lives?   Q J Econ. 2009;124(2):597-636. doi:10.1162/qjec.2009.124.2.597PubMedGoogle ScholarCrossref
    3.
    Xu  K, Evans  DB, Carrin  G, Aguilar-Rivera  AM, Musgrove  P, Evans  T.  Protecting households from catastrophic health spending.   Health Aff (Millwood). 2007;26(4):972-983. doi:10.1377/hlthaff.26.4.972PubMedGoogle ScholarCrossref
    4.
    Liu  C, Chhabra  KR, Scott  JW.  Catastrophic health expenditures across insurance types and incomes before and after the Patient Protection and Affordable Care Act.   JAMA Netw Open. 2020;3(9):e2017696. doi:10.1001/jamanetworkopen.2020.17696PubMedGoogle Scholar
    5.
    Jacobs  PD.  The impact of Medicare on access to and affordability of health care.   Health Aff (Millwood). 2021;40(2):266-273. doi:10.1377/hlthaff.2020.00940PubMedGoogle ScholarCrossref
    6.
    McWilliams  JM, Meara  E, Zaslavsky  AM, Ayanian  JZ.  Use of health services by previously uninsured Medicare beneficiaries.   N Engl J Med. 2007;357(2):143-153. doi:10.1056/NEJMsa067712PubMedGoogle ScholarCrossref
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