Medicare: An Overview

1. Medicare: An Overview September 30, 2014 Society for Financial and Professional Development 7th Annual Financial Literacy Leadership Conference Christina Swoope, MSPH Policy Analyst, Program on Medicare Policy Kaiser Family Foundation

2. TV ads would have you believe that the typical older American looks something like this…

3. Characteristics of the Medicare Population Percent of total Medicare population: NOTE: ADL is activity of daily living. SOURCE: Urban Institute and Kaiser Family Foundation analysis, 2013; Kaiser Family Foundation analysis of the Centers for Medicare & Medicaid Services Medicare Current Beneficiary Survey 2010 Cost and Use file.

4. Half of all Medicare beneficiaries had incomes below $23,500 per person in 2013 1% had incomes above $171,650 5%had incomes above $93,900 50% had incomes below $23,500 25% had incomes below $14,400 SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2013.

5. Half of all Medicare beneficiaries had savings below $61,400 per person in 2013 Savings include retirement account holdings (such as IRAs or 401Ks), savings accounts, bonds and stocks SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2013.

6. Half of all Medicare beneficiaries had home equity below $66,700 per person in 2013 1% had home equity above $799,850 5% had home equity above $398,500 50% had home equity below $66,700 25% had home equity below $12,250 21% had $0 in home equity SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2013.

7. Growth in per capita income is projected to be concentrated among beneficiaries with higher incomes Per Capita Total Income (in 2013 dollars) 95th percentile 90th percentile 75th percentile 50th percentile (Median) 25th percentile Year NOTE: All incomes are adjusted to 2013 dollars. SOURCE: Urban Institute / Kaiser Family Foundation analysis, 2013.

8. Premiums are a large share of average total out-of-pocket health care spending by Medicare beneficiaries; long-term care facility costs are the largest component of spending on services Distribution of Average Total Out-of-Pocket Spending on Services and Premiums by Medicare Beneficiaries, 2010 Long-term care facility Medical providers and supplies Services Premiums Prescription drugs Dental Inpatient hospital Skilled nursing facility Outpatient hospital Home health Average Total Out-of-Pocket Spending on Services and Premiums, 2010: $4,734 NOTE: Analysis excludes beneficiaries enrolled in Medicare Advantage plans. Premiums includes Medicare Parts A and B and other types of health insurance beneficiaries may have (Medigap, employer-sponsored insurance, and other public and private sources).SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2010 Cost & Use file.

9. Average out-of-pocket spending on services is higher for women on Medicare than men and increases with beneficiaries’ age Medicare Beneficiaries’ Average Total Out-of-Pocket Spending on Services and Premiums, by Gender and Age, 2010 Gender Age NOTE: Analysis excludes beneficiaries enrolled in Medicare Advantage plans. Premiums includes Medicare Parts A and B and other types of health insurance beneficiaries may have (Medigap, employer-sponsored insurance, and other public and private sources).SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2010 Cost & Use file.

10. Even with Medicare and supplemental coverage, Medicare households spent far more than others on health expenses in 2012 Medicare Household Spending Non-Medicare Household Spending Transportation Transportation Health Care Average Household Spending = $33,993* Average Household Spending = $53,000 NOTE: *Estimate statistically significantly different from the non-Medicare household estimate at the 95 percent confidence level. SOURCE: Kaiser Family Foundation analysis of the Bureau of Labor Statistics Consumer Expenditure Survey Interview and Expense Files, 2012.

11. Overview of Medicare Part B Premiums Under Current Law $105 $147 $210 $273 $336 SOURCE:Kaiser Family Foundation illustration of 2014 Income-Related Medicare Part B Premiums. Share of Part B beneficiaries from Urban institute analysis of DYNASIM for the Kaiser Family Foundation.

12. Most Medicare beneficiaries have some source of supplemental coverage, 2010 No Supplemental Coverage Total Number of Beneficiaries, 2010: 48.4 Million SOURCE: Kaiser Family Foundation analysis of the Centers for Medicare & Medicaid Services Medicare Current Beneficiary 2010 Cost and Use file.

13. Medicare Beneficiaries have many plans to choose from Plan Choice Traditional Medicare Medicare Advantage No Supplemental Medigap Medicaid Employer Sponsored HMO PPO Private FFS +

14. Important Dates and Deadlines Initial Enrollment Period Enroll within 3 months of the month of your 65th birthday.* Birthday Month Ex: June, July, August October, November, December September December October January March General Enrollment Period Enroll now if you did not when you were first eligible.* 3 Months 3 Months 1 7 31 15 Open Enrollment Period Reevaluate your health or drug plan annually and make any necessary changes Open Enrollment General Enrollment Special Enrollment Period Sign up for Part A and/or Part B the month after your employment or group health plan insurance ends 8 Months NOTES: *You may have to pay a higher premium for late enrollment in Part A and/or a higher premium for late enrollment in Part B. SOURCE: Centers for Medicare and Medicaid Services, Medicare and You Handbook, 2014

15. Medicare is personally important to the majority of the public How important is Medicare for you and for your family? SOURCE: Kaiser Family Foundation/Robert Wood Johnson Foundation/Harvard School of Public Health, The Public’s Health Care Agenda for the 113th Congress (conducted January 3-9, 2013)