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Original Investigation
June 2017

Out-of-Pocket Spending and Financial Burden Among Medicare Beneficiaries With Cancer

Author Affiliations
  • 1Department of Radiation Oncology and Molecular Radiation Sciences, Johns Hopkins School of Medicine, Baltimore, Maryland
  • 2Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, Baltimore, Maryland
  • 3Department of Surgery, Johns Hopkins School of Medicine, Baltimore, Maryland
  • 4Sidney Kimmel Comprehensive Cancer Center, Cancer Prevention and Control Program, Johns Hopkins School of Medicine, Baltimore, Maryland
JAMA Oncol. 2017;3(6):757-765. doi:10.1001/jamaoncol.2016.4865
Key Points

Questions  What are the out-of-pocket (OOP) costs incurred by Medicare beneficiaries with cancer, and what factors and services drive these high OOP costs?

Findings  In this nationally representative panel study, Medicare beneficiaries with a new cancer diagnosis were vulnerable to high OOP costs depending on their supplemental insurance: beneficiaries without supplemental insurance incurred OOP expenditures that were a mean of 23.7% of their household income, with 10% incurring OOP costs that were 63.1% of their household income. Hospitalizations were a primary driver of these high OOP costs.

Meaning  Elderly patients with cancer need improved protection against costly hospitalizations.

Abstract

Importance  Medicare beneficiaries with cancer are at risk for financial hardship given increasingly expensive cancer care and significant cost sharing by beneficiaries.

Objectives  To measure out-of-pocket (OOP) costs incurred by Medicare beneficiaries with cancer and identify which factors and services contribute to high OOP costs.

Design, Setting, and Participants  We prospectively collected survey data from 18 166 community-dwelling Medicare beneficiaries, including 1409 individuals who were diagnosed with cancer during the study period, who participated in the January 1, 2002, to December 31, 2012, waves of the Health and Retirement Study, a nationally representative panel study of US residents older than 50 years. Data analysis was performed from July 1, 2014, to June 30, 2015.

Main Outcomes and Measures  Out-of-pocket medical spending and financial burden (OOP expenditures divided by total household income).

Results  Among the 1409 participants (median age, 73 years [interquartile range, 69-79 years]; 46.4% female and 53.6% male) diagnosed with cancer during the study period, the type of supplementary insurance was significantly associated with mean annual OOP costs incurred after a cancer diagnosis ($2116 among those insured by Medicaid, $2367 among those insured by the Veterans Health Administration, $5976 among those insured by a Medicare health maintenance organization, $5492 among those with employer-sponsored insurance, $5670 among those with Medigap insurance coverage, and $8115 among those insured by traditional fee-for-service Medicare but without supplemental insurance coverage). A new diagnosis of cancer or common chronic noncancer condition was associated with increased odds of incurring costs in the highest decile of OOP expenditures (cancer: adjusted odds ratio, 1.86; 95% CI, 1.55-2.23; P < .001; chronic noncancer condition: adjusted odds ratio, 1.82; 95% CI, 1.69-1.97; P < .001). Beneficiaries with a new cancer diagnosis and Medicare alone incurred OOP expenditures that were a mean of 23.7% of their household income; 10% of these beneficiaries incurred OOP expenditures that were 63.1% of their household income. Among the 10% of beneficiaries with cancer who incurred the highest OOP costs, hospitalization contributed to 41.6% of total OOP costs.

Conclusions and Relevance  Medicare beneficiaries without supplemental insurance incur significant OOP costs following a diagnosis of cancer. Costs associated with hospitalization may be a primary contributor to these high OOP costs. Medicare reform proposals that restructure the benefit design for hospital-based services and incorporate an OOP maximum may help alleviate financial burden, as can interventions that reduce hospitalization in this population.

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