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How does current insurance landscape affect seniors?

Health Care and Health Insurance
by Heather Robinson
How does current insurance landscape affect seniors?
How does current insurance landscape affect seniors?

The vast majority of senior citizens are eligible for enrollment in Medicare, a low-cost, highly valuable health insurance option that makes it easier for millions to make ends meet. However, Medicare coverage alone often isn't enough to help seniors meet all their health care needs, and supplemental insurance is often needed to make up the difference.

For people living on a fixed income, as many seniors do, that can create some unique issues. As with many other age demographics, about 1 in 7 older Americans say they are unable to pay for the drugs their doctors prescribe, according to new West Health Gallup research. Moreover, baby boomers and the silent generation say they've taken an estimated $22 billion out of their long-term savings accounts like 401(k)s and IRAs to cover the cost of the care they need: Just in the past year, more than 9 out of 10 individuals within those demographics also think such issues will not improve over time.

In addition, many seniors report a lot of the same difficulties other Americans face when it comes to choosing health insurance, the survey found. When choosing supplemental coverage options, it's not always clear to seniors or their family members what decisions will be the best ones based on their unique financial and health care needs.

Seniors have numerous concerns about their health care and coverage.Seniors have numerous concerns about their health care and coverage.

Rising anxiety
With all those issues in mind, it should come as little surprise that many people approaching Medicare eligibility - those between 50 and 64 years old - are concerned about what will happen to them as their health care costs rise, according to a recent poll from the AARP and the University of Michigan. Because of the uncertainty around health care reform at the state and federal levels, more than 2 in 3 are worried that their coverage situations will change in the years ahead. 

Moreover, nearly half are in no way confident that they will be able to afford whatever insurance is available to them in their golden years, and more than a quarter feel that way about being able to cover those costs over the next 12 months. Here, too, it seems older Americans aren't actually sure what they are and are not eligible for when it comes to coverage as they age, and already about 1 in 8 say they've gone without care because they're worried about its cost. The same was true for almost as many people who opted not to fill prescriptions.

Today, about 14% of pre-Medicare-eligible people kept jobs they otherwise might not have specifically because they wanted to keep their current health insurance. Another 11% think they may delay retirement, or have already decided to do so, for the same reason.

What's the cost?
While there is a lot of concern and confusion about the cost and ease of obtaining comprehensive health coverage as people age, low-cost supplemental plans are often seen as key to bridging some of those gaps. While many seniors have relatively small, fixed incomes thanks to pensions, Social Security and payouts from long-term savings vehicles, in a lot of cases, what they pay for coverage can be in a broad range based on their needs.

For instance, monthly premiums for things like dental and vision coverage can be quite affordable, and depending upon the supplemental Medicare plans they choose, they could pay only a little more than $100 per month for relatively bare-bones coverage, and more than four times that much for more comprehensive plans.

Much to consider
Of course, even so-called Medigap coverage isn't always adequate for older people, and it can change dramatically from one year to the next. A recent poll of seniors enrolled in Medicare Part D - one of the most popular Medigap options, because it helps cover prescription costs - found that proposed changes at the federal level were not widely known but were rather concerning.

More than 4 in 5 seniors polled by the Pharmaceutical Care Management Association said they were happy with their Part D coverage, and about as many thought the plans covered their drug costs. Even more found the coverage easy to use, and two-thirds thought their out-of-pocket costs were satisfactory.

However, only 1 in 4 knew federal lawmakers were considering doing away with drug rebates, which could raise premiums by as much as 25%.

This also comes at a time when the Social Security Administration made a processing error first discovered in May, in which it failed to deduct Medicare premiums from the Social Security checks for about 250,000 enrollees, for as long as five months. Some recipients may lose coverage as a result, and others may need to find the money to make up the difference. However, officials say the error has otherwise been corrected.

Clearly, health insurance for seniors is a frustrating, fluid and sometimes confusing topic, but the fact of the matter is that these people rely on care far more than other age groups. As a consequence, it is incumbent upon insurers and health care providers to give them as much clarity around their options as possible. This will help to inform the best decisions about coverage and care, helping ensure they stay happy and healthy for many years to come.

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