Why Seniors With Private Health Are Losing Money

Many seniors with private health coverage need cost-cutting strategies in order to afford premiums and out-of-pocket expenses. They rely on comparison shopping for better rates, cutting expenses elsewhere and cutting food spending in order to afford premiums and out-of-pocket expenses.

Seniors unable to qualify for Medicaid can use Medicare’s Spend Down program to lower their medical costs. Others find relief through enrolling in a bundled Medicare Advantage plan from Humana.

Costs Are Out of Control

The US health system is one of the world’s most expensive, with cost inflation increasing rapidly due to numerous factors, including fee-for-service provision and investment in new medical technologies; as well as consumer demand; insurance premiums are growing faster than wages or inflation and widening gaps between health care costs and incomes.

Our survey finds that many individuals, regardless of their insurance source, are having difficulty affording health care they require. Two-thirds of those covered by private plans such as employer, marketplace or individual market plans had difficulty affording health care costs, while those covered by Medicare or Medicaid experienced similar challenges.

These difficulties have contributed to an increase in medical debt. Thirty percent of those covered under employer coverage had medical debt, followed by 33 percent among marketplace/individual market plans and 21 percent among Medicaid. Nearly one-third of those carrying debt reported that it caused them to delay or forgo necessary treatments and increase overall stress levels; one quarter indicated increased overall stress levels as a result.

These issues can be addressed through various policies, including mandatory open enrollment periods and prohibitions of preexisting condition limitations. Unfortunately, too swift an implementation may create additional incentives for adverse selection: favorably risk consumers may pursue lower coverage levels initially but switch later when their health status worsens – leaving less favorable risk consumers paying higher rates.

The System is Broken

Private health insurance is a financial decision, and as with other such decisions, people should use their own knowledge when making this choice. But many are losing faith in the market’s ability to offer value for money due to premium increases, product restrictions and rising out-of-pocket expenses. Therefore, the federal government should direct the Productivity Commission to conduct a full review of Australian health insurance industry with an aim of finding ways to enhance value proposition for policy holders generally and older people in particular.

People’s frustration with the health care system extends well beyond rising health care prices. They worry that costs keep them from receiving needed treatment, leaving provider bills piling up medical debt. A third or more of those covered by employer, marketplace or individual-market plans, Medicaid or Medicare reported having to delay or skip care due to cost issues; two in five said these financial constraints had actually made them sicker.

Medical debt is also making it harder for families to pay other essentials, with over one third reporting that health care costs have led them to cut back on other necessities like food or heat; almost one fifth had to take on another job due to these rising medical costs; these concerns are driving an anti-system movement worldwide, such as Trump and Brexit.

The Market Is Oversaturated

Market saturation occurs when demand for a company’s product has been met fully; it could be the result of competition or decreased need; when this occurs, increasing revenues becomes difficult without creative solutions and innovative thinking.

One of the primary issues for those with private health insurance is affording their healthcare costs. A Commonwealth Fund survey discovered that working-age adults typically struggle to cover these costs; particularly those who had health coverage all year (43 percent in employer plans, 57 percent enrolled in marketplace or individual-market plans, 45 percent with Medicaid and 51 percent with Medicare) reported difficulty covering health expenses.

Reason being, premiums and out-of-pocket costs for health care are increasing rapidly, forcing many individuals to make sacrifices elsewhere in order to afford health care coverage.

This situation is both unfair and detrimental to older Americans as a whole, as hospital systems, physicians and other providers lose money due to Medicare’s lower reimbursement rates; when this happens they may be forced to either reduce services or cease accepting Medicare patients altogether – leaving Americans without options and potentially diminishing the quality of care delivered.

Medicare is the Only Option

Many seniors with private health insurance must make tough choices about whether to keep it. Options might include buying Medicare Advantage plans or private supplemental policies or opting out altogether – which may lower premiums but could have adverse repercussions for public services if enough older people decide not to keep private insurance. National Seniors Australia CEO Chris Grice has petitioned the Productivity Commission for an inquiry into the affordability of private health coverage plans.

While the vast majority of those covered by insurance report being satisfied, several issues persist across both private and public systems. According to surveys, cost-related issues like high deductibles/copays/narrow provider networks/surprise medical bills are prevalent across employer and marketplace plans as well as Medicare Advantage/Medicaid managed care plans.

These issues impede access to health services for elderly poor. Low-income people tend to spend one third of their income paying out-of-pocket costs, insurance premiums, and uninsured services; moreover they tend to use health services more often due to health conditions requiring care resulting in increased expenses.