I’m Alina Salganicoff, Vice President and Director of Women’s health policy at the Kaiser Family Foundation. The tutorial you are about to view is designed to provide you with an overview of the key health coverage and affordability issues facing women who are over age 65, specifically focusing on the role of Medicare and Medicaid and the impact of long-term care.
Medicare is the main insurer for the older population and makes a critical difference in making health care accessible and affordable for seniors. It is federally financed and administered and covers 44 million people, most of whom are 65 and older. It does also cover some younger people who qualify because they have permanent disabilities. Medicare covers a broad range of services, including hospitalization, doctor visits, supplies, and screenings. And most recently it was expanded to provide assistance with the costs prescription drugs.
Because they live longer than men, women account for more than half (57%) of the total Medicare population. While men comprise the majority of the disabled population on Medicare who is under-65, women make up a larger an increasing share of the older age groups. Figure
Before we get to the specific concerns for older women, it’s important to have a basic understanding of the ABC and now D’s of Medicare. Medicare is not a single program but rather composed of different elements. Part A is the component that pays for inpatient hospital services, hospice care and for short-term skilled nursing facility care and home health visits following a hospital stay. Individuals are entitled to Part A if they or their spouse paid Medicare taxes for 10 years or more. Individuals do not pay a premium for Part A, as it is funded by a payroll tax that workers and employers pay. Part B is a voluntary program that pays for services such as physician care, outpatient hospital visits, preventive services, and mental health visits. Part B is financed by a combination of general revenues and beneficiary paid premiums that are typically deducted directly from beneficiaries’ Social Security checks. Part C refers to the part of the program that delivers Medicare benefits to beneficiaries through managed care plans, such as HMOs and is called Medicare advantage. Beneficiaries can CHOOSE TO sign up for a Medicare Advantage plan and some pay an additional premium for supplemental services included in the plan, like prescription drugs. Part D is the newest part and refers to outpatient prescription drug benefit. Beneficiaries can get access to the Medicare drug benefit ONLY if they enroll in private plans that contract with Medicare or through Medicare Advantage. This new benefit also includes subsidies for low income individuals which reduce or eliminate premiums and cost-sharing requirements for drugs benefit, helping to make it more affordable .
Despite it’s critical role, the program has some very notable costs and gaps in coverage. First of all, it doesn’t cover hearing aids, eyeglasses or dental care, which are essential services for seniors. Another major gap is its very limited coverage for long-term care services, such as nursing home stays, only covering 100 days after a hospitalization.. It also requires some heavy out-of-pocket expenses from beneficiaries in the form of premiums, deductibles, and cost sharing. For example, the Part A deductible which must be paid with every hospitalization is over $1000. The part B monthly premium is now approaching $100 a month, and many part B benefits, such as preventive services, have cost sharing. For women, mammography, clinical breast exams, bone density tests, and visits for Pap test and pelvic exams have a 20% coinsurance. The newer Part D drug plans also have their own premiums which average around $25 a month, but range between $10 and $130 a month depending on the plan. These plans also have deductible and copayment requirements. And finally unlike most insurance that workers get through their employers, Medicare has no cap on out of pocket spending, which can rapidly add up as you can see. Overall, in 2005, Medicare paid for just under half of beneficiaries’ health and LTC costs. Beneficiaries paid one-fifth of their costs out-of-pocket themselves.
To help offset these gaps, the majority of people on Medicare have some type of other health insurance. The largest group is those who have employer sponsored insurance, usually in the form of a retiree health benefit, but also 6 million seniors on Medicare are working and getting benefits through their employers. As you can see here, a smaller share of women than men get this kind of coverage. This is largely due to the nature of women’s workforce participation, where the fact that women are more likely to work part-year, part-time or work in low wage jobs translates into fewer benefits like retiree coverage. About one in five Medicare beneficiaries are enrolled in a Medicare Advantage plan which is the managed care option I described earlier. Medicaid is a critical source of supplemental coverage for poor and many low-income beneficiaries, particularly women. More about Medicaid in a minute. Another large share of beneficiaries are enrolled in self purchased plans also called Medigap. With these plans, beneficiaries can purchase supplemental coverage from different types of Medicare approved plans that vary in their premium cost as well as the scope of coverage and out-of-pocket spending requirements. Finally a small group, about 8 of women and 11 percent of men have no other supplemental coverage. These individuals are the most at risk of being exposed to significant costs because they only get the Medicare benefits without any other out-of-pocket limits or other cost protections.
Medicaid is a federal-state program, where each state operates its own program under broad federal guidelines, and the federal and state governments share the costs. It covers 6 million seniors that account for over a quarter of Medicaid spending, due in part to the intensity and costs of services. For those seniors who qualify, Medicaid covers many key services that Medicare does not cover such as vision, eyeglasses, hearing and dental services as well as nursing home care and personal care. Medicaid also pays for Medicare premiums, deductibles and copayments for those who qualify. Now, qualifying for Medicaid is very complicated and there are different levels of coverage for seniors, but suffice it to say that to qualify you must be very low-income or that you have to spend down or deplete your income and assets on health expenses until you meet the poverty level criteria. Seniors who earn slightly more than the poverty level but are still low-income also can qualify for Medicaid assistance with Medicare’s costs, such as the deductibles and premiums, but do not get nursing home care and other benefits.
Here we see why this program is such an important supplement to Medicare for women. As women age, their incomes decline, with just over one quarter of the oldest group with incomes below $10,000. We also see that African Americans and Latina women are much more likely to be in that very low income group. Clearly, this translates in considerable disparities in ability to pay for out-of-pocket costs.
Medicaid however, is of vital assistance to millions of these very low-income women. As you can see here, that among older Medicaid beneficiaries or dual eligibles as they are sometimes called, women make up the sizable majority.
Despite the presence of programs such as Medicaid and Medicare, seniors spend a significant amount of money on health services. And women spend on average a higher amount and a higher share of their income than men. Premium costs account for a major share of spending. Though the proportions are different for men and women, the dollar amount is roughly the same, about $1700, in 2005. This analysis predates the Medicare drug benefit, so the premium share is likely to be even higher today. The major difference between men and women is on spending for long-term care. In 2005 women averaged about $1070 compared to men who averaged $700.
Not surprisingly, older women are the primary users of long-term care services -- three quarters of nursing home residents and two thirds of home health users are women.
The reasons that women comprise such a large share of the long-term care population are complex. First of all, women have higher rates than men of limitations in ADLs and IADLs than men– these are activities that we consider daily functions – dressing, bathing, as well as taking care of finances, grocery shopping. Also, nearly one in four older women has a cognitive or mental impairment. We also see a pretty clear gradient effect with age, with higher rates of disabling conditions that require more assistance as we grow older.
And while both older men and women face a broad range of health, social and economic challenges. Women are at a distinct disadvantage when it comes their ability to manage independent living when their health deteriorates. As you can see here a significantly larger share of women than men are over 85 and older. This is not completely surprising as women have a longer life expectancy then men, but are more likely to live these years with chronic illness and disability. As a result of this longer life expectancy women are considerably more likely to be widowed and live alone. And finally, earning patterns that are shaped by women during their working years, where they earn about three quarters of men translate into lower income and fewer assets in old age.
As a result, the cost burdens of long-term care can fall especially hard on women. On average, the costs of a year for a private room in a nursing home ran about 77K, with costs slightly lower for a semiprivate room. Assisted living charges are lower for those who are more functional but as you can see the average annual costs for one bedroom unit costs 36k costs for a year in an assisted living facility. About half a these facilities charge extra for services for residents with dementia such as Alzheimers. And assistance while living in the community is also quite costly with home health services averaging around $29 an hour and homemaker services about 18 dollars an hour. This can really add up if you had to pay for a visit from a home health aide 3 times a week on average the costs would be about $18,000 a year for those services.
In fact, nearly one fifth of all long-term care expenditures are paid for directly by families. As I mentioned earlier Medicare only covers these services following a hospitalization. Privately purchased long-term care insurance only covers about 7% of long-term care costs. This coverage can be quite expensive, for example, an individual who's 65 years old and in good health can expect to pay between $2,000 and $3,000 a year for a policy that covers nursing home care and home care. That amount can be unaffordable for many older women and men. And if a senior is in poor health they many not even qualify for coverage. The majority of long-term care costs are paid for by Medicaid, but as I mentioned earlier, it only covers those seniors and people with disabilities who are poor or who have had to spend all of their earnings and assets on health care and have become impoverished as a result. Unfortunately there are few public policy solutions on the table at this time to address these devastating costs. This is a critical issue for women as life expectancy increases and the population of women ages and will become even more of a priority .
In conclusion, as we examine the main cost and coverage challenges that face older women, it is important to consider that they have fewer financial resources than men in the face of greater rates of health problems and functional limitations. These factors place them at higher risk for needing long-term care. This is compounded by the fact that so many women are living alone and do not have the family or social or economic resources that could keep them functioning at home Second, while nearly all women over 65 have Medicare, many have difficulty affording premiums, copayments and deductibles. Increases in medical costs will only exacerbate the problem for women whose incomes do not keep up with the rate of health care inflation. Many seniors, particularly those of modest means, may be forced to make some very difficult trade offs to meet these payments. And finally long-term care is a poorly understood but critically important women’s health issue. For women, this is becoming a more visible health concern and hopefully in the near future, policy makers will increasingly grapple with this major challenge.
I hope you now have a better sense of the major health coverage and affordability challenges facing older women in the U.S. If you’d like to learn more please be sure check out these resources. Thanks for your attention.
Health Care and Long-term Care Policy: Concerns Facing Older Women Alina Salganicoff, Ph.D. Vice President and Director, Women’s Health Policy Kaiser Family Foundation August 2008 Figure 1
Medicare matters for older women <ul><li>Medicare is a federal health insurance program designed for the elderly and people with disabilities </li></ul><ul><li>Covers 44 million people </li></ul><ul><ul><li>37 million people ages 65 and over, and 7 million under age 65 with a permanent disability </li></ul></ul><ul><li>Most major health care services covered </li></ul><ul><ul><li>Hospital stays </li></ul></ul><ul><ul><li>Physician visits </li></ul></ul><ul><ul><li>Preventive care, including annual screenings </li></ul></ul><ul><ul><li>Medical supplies, and other ancillary services </li></ul></ul><ul><ul><li>Prescription drugs (through private plans) </li></ul></ul>Figure 2
Women comprise the majority of Medicare enrollment Source: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey Access to Care file, 2006. Number of Beneficiaries 39.8 million 6.3 million 16.3 million 12.5 million 4.7 million Figure 3 Medicare beneficiaries, by Age and Sex, 2006
How does Medicare work? <ul><li>Part A: Covers inpatient hospital care, skilled nursing facility care (following hospitalization), hospice care, and limited home health services (up to 100 days post-hospital) </li></ul><ul><li>Part B: Supplementary Medical Insurance program helps pay for Physician services, outpatient hospital care, preventive services, such as mammography screening, mental health services, home health, and x-rays, diagnostic tests, durable medical equipment </li></ul><ul><li>Part C: Provides care through managed care plans, such as local HMOs, new regional PPOs, private fee-for-service plans, and is referred to as Medicare Advantage </li></ul><ul><li>Part D: Medicare prescription drug benefit, which are private plans that contract with Medicare. These include stand-alone prescription drug plans and Medicare Advantage plans that also include the Part D benefit. </li></ul>Figure 4
Medicare costs and gaps <ul><li>Benefit gaps </li></ul><ul><ul><li>No hearing aids, eyeglasses, or dental care </li></ul></ul><ul><ul><li>Limited long-term care </li></ul></ul><ul><li>Significant cost-sharing requirements </li></ul><ul><ul><li>Part A deductible ($1,024 in 2008) </li></ul></ul><ul><ul><li>Part B monthly premium ($96.40/month in 2008) </li></ul></ul><ul><ul><ul><li>Most preventive services have cost-sharing requirement </li></ul></ul></ul><ul><ul><ul><li>20% coinsurance for mammography, CBE, Bone Mass, Pap test (no charge for lab) </li></ul></ul></ul><ul><ul><li>Part D - Medicare drug plans charge various premiums, deductibles, co-payments </li></ul></ul><ul><ul><li>No cap on out-of-pocket spending </li></ul></ul><ul><li>Medicare paid for 48% of total covered health and long-term care costs in 2005; beneficiaries paid 18% out-of-pocket </li></ul>Figure 5
Supplemental health insurance coverage Men 65 and Older N = 14.3 million Women 65 and Older N = 19.2 million Source: Kaiser Family Foundation analysis of Medicare Current Beneficiary Survey Access to Care file, 2006. Figure 6
Medicaid matters for older women <ul><li>Medicaid—a federal/state health insurance program or low-income families, elderly, and disabled </li></ul><ul><ul><li>Covers 55 million people, including 6 million people age 65 and older </li></ul></ul><ul><ul><li>Elderly account for 11% of Medicaid enrollees but 28% of overall spending </li></ul></ul><ul><li>Covers benefits not included in Medicare </li></ul><ul><ul><li>Vision, dental, and hearing services, differs by state </li></ul></ul><ul><ul><li>Long-term care services </li></ul></ul><ul><ul><li>Pays for Medicare premiums, deductibles, coinsurance and copays </li></ul></ul><ul><li>Eligibility is limited to very low income/disabled elderly </li></ul><ul><ul><li>Incomes below 100% of poverty </li></ul></ul><ul><ul><li>Others must spend-down or deplete their income and assets to become eligible </li></ul></ul><ul><ul><li>Some low-income Medicare beneficiaries who are not poor enough to qualify for full Medicaid benefits can get Medicaid assistance for Medicare cost-sharing </li></ul></ul>Figure 7
Many older women on Medicare are impoverished Percent of women ages 65 and older on Medicare with annual income below $10,000: Source: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey Access to Care file, 2006. Figure 8 65 to 74 75 to 84 85 & Older Age Race/Ethnicity White African American Latina
Older women comprise the majority of seniors on Medicaid Source: Kaiser Commission on Medicaid and the Uninsured and Urban Institute analysis of 2004 MSIS data, 2007. Women = 70% of the 5.9 million Medicaid beneficiaries 65 and older Distribution of Seniors with Medicaid, by Age and Sex, 2004 Figure 9
Out-of-pocket health spending by Medicare beneficiaries age 65+, 2005 Note: Estimates reflect mean out-of-pocket spending for Medicare and private insurance premiums and health care services. Source: KFF analysis of the CMS Medicare Current Beneficiary Survey Cost and Use File, 2005. Women 65+ Total OOP = $94 billion Men 65+ Total OOP = $63 billion $4,476 $4,026 39% 43% 17% 20% 14% 7% 24% 19% 15% 4% Figure 10
Women comprise the majority of the long-term care population Nursing Home Residents Home Health Users Total = 1.5 million Total = 2.5 million Source: Kaiser Family Foundation analysis of Medicare Current Beneficiary Survey Access to Care file, 2006. Figure 11 Men 32% Women 68% Men 24% Women 77%
Many older women have limitations that predispose them to needing long-term care Note: ADLs refer to Activities of Daily Living (bathing, dressing, eating, walking, using the toilet, getting in and out of chairs). IADLs refer to Instrumental Activities of Daily Living (doing housework, making meals, managing money, shopping, using the telephone). Analysis excludes institutional population. Source: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey Access to Care file, 2006. By Sex: Women, by Age: Figure 12
Economic and social factors also affect long-term care use for women Figure 13 Source: KFF analysis of Medicare Current Beneficiary Survey, 2006
Long-term care services are costly <ul><li>In 2008: </li></ul><ul><ul><li>Home health services average $29/hour </li></ul></ul><ul><ul><li>Homemaker services average $18/hour </li></ul></ul><ul><ul><li>Adult Day Care average $59/day </li></ul></ul>Average annual cost Source: National Clearinghouse for Long-Term Care Information, U.S. Department of Health and Human Services, 2008 Figure 14
Medicaid is a major payer of long-term care Source: National Clearinghouse for Long-Term Care Information, U.S. Department of Health and Human Services, 2008 Figure 15 Total long-term care expenditures in 2005 = $206.6 billion
Coverage and cost challenges for older women <ul><li>Women have fewer financial resources: Social Security, pensions, and assets </li></ul><ul><li>Medicare out-of-pocket costs can be burdensome </li></ul><ul><li>Long-term care coverage limited </li></ul><ul><ul><li>Medicare and home care </li></ul></ul><ul><ul><li>Medicaid and nursing home care </li></ul></ul>Figure 16
For more resources <ul><li>KaiserEDU </li></ul><ul><ul><li>Medicare </li></ul></ul><ul><ul><li>Women’s Health Policy </li></ul></ul><ul><ul><li>Medicaid/SCHIP </li></ul></ul><ul><li>Kaiser Family Foundation </li></ul><ul><ul><li>Medicare </li></ul></ul><ul><ul><li>Women’s Health Policy </li></ul></ul><ul><ul><li>Kaiser Commission on Medicaid and the Uninsured </li></ul></ul><ul><li>Centers for Medicare and Medicaid Services </li></ul>Figure 17