Premature Deaths Because People Can’t Afford Medical Care

The views and opinions expressed in Bob’s Blog are solely those of the author and do not purport to reflect the views and opinions of the CAC Office on Aging or its staff. Posted 12-20-2022

It’s sad. There are no real studies about how some older people may not be getting the healthcare they need because they can’t afford it or because they don’t want to add more medical debt to what they already have.

Sue’s Story

Sue is a divorced lady who works at a job paying $12 an hour. Her employer has a health insurance plan. However, the plan does not cover much of the expenses anyone of them may incur.

In 2020 when she was 59 years old, Sue had a heart attack at work. She ended up having a Double Coronary Artery Bypass. Her insurance paid what was required under plan for her medical expenses. There was still a lot not covered. In 2022, Sue still owed over $200,000.

Sue had been in an accident many years ago and had a fusion done on the vertebrae in her cervical spine. In the last several years she has started to have ongoing pain in her neck.

Her doctors have told her they have to restabilize the cervical vertebrae. That is scheduled for early in 2023. The cost for the hospitalization and surgery will be high.

Sue won’t be able to pay for any charges. Any remaining balance after what her insurance pays will be added to the $200,000 she already owes.

Sue doesn’t have a 401K plan through her employer. She doesn’t have any savings of any type. Her monthly Social Security benefit will not be great. When she is 65, she will not be able to retire. She will have to keep on working as long as she can.

There is no way Sue can pay off all of the medical debt she has. Every month she gets bills for it. Some have been turned over to Collection agencies. Their representatives call and harass her about what she owes.

This cause her to worry. It probably will get worse as she ages. She may avoid getting care for any medical problems she has in the future unless it’s an emergency.

Janet’s Story

At 65 years of age in 2020, Janet was diagnosed with endometrial cancer. She started treatment for it and has seen several different oncologists. Unfortunately, the treatment she has received has just delayed the progression of the disease.

In late 2022, the cancer spread to her lymph nodes and breast. She is receiving more aggressive treatment.

Janet has been on Medicare since she turned 65 and has a Medicare Advantage Plan. However, not all of her treatments have been covered by the plan. At times she has been seen by doctors outside the network. Their charges were not covered.

Janet’s unpaid medical expenses mount. Since she had no savings, she was forced to take out a Home Equity Line of Credit on her home.

That may help cover some of the bills she has. Once she uses all of the line of credit, she won’t be able to pay the charges for additional care she may need.

Most People Have No Idea of What Their Medical Care Will Cost After Retirement

During their working years, people are never told what it may cost for medical care in their later years. Sadly, as they approach retirement, most underestimate how much they will have to pay. So, their assumptions are way off.

According to Fidelity Investments, the average American expects to pay about $41,000 in medical expenses after they retire. They think they can handle that.

Fidelity then projects a 65 year old couple retiring in 2022 will spend about $315,000 for health care and medical expenses during the rest of their lives.

That Fidelity estimate may be low. HealthView Services Financial projected the average healthy 65 year old couple retiring in 2021 could expect to live to 87 and 89 respectively. During retirement, they will spend $662,156 on medical expenses. HealthView also projected they would be spending 68% of their Social Security Benefits on those expenses.

In a 2019 report, HealthView estimated the annual costs for medical care for a healthy 65 year-old couple starting that year as follows:

Remember, these are yearly costs. These do not include any costs for care in a nursing home or extended care facility.

Here is another startling estimate. The cost of medical care during the last year of a person’s life will be about $59,000.

Medicare, Medigap and Medicare Advantage

Most of us believe Medicare, Medigap or Medicare Advantage will cover all medical expenses after we retire. Sadly, that’s not true.

Medicare Part A pays for all of the charges by a hospital during the first 60 days of confinement. If confinement beyond 60 days is necessary, the amount Medicare pays decreases.

Medicare Part B covers charges for medical services like doctor’s visits, outpatient care and others Part A doesn’t cover. It pays 80% of these charges.

As you can see, Medicare Parts A and B do not pay for all of the charges for medical services. Insurance companies started offering supplemental policies to pick up some or all of the balances Medicare Parts A and B didn’t pay. These are called Medigap plans. Even these do not pay the remaining balances in full.

More recently another option became available. This is a Medicare Advantage Plan. Medicare-approved private companies that agree to follow rules set by Medicare offer these plans. If a person opts for a Medicare Advantage Plan, they will still have Medicare but they will get most of their Part A and Part B coverage from their Medicare Advantage Plan not Medicare Parts A and B.

Medicare Advantage Plans pay most of the expenses – not all. If a person sees a doctor or have services by a medical provider outside the network, the charges won’t be covered. If a specialist not in the network is called in to see them, their charges won’t be covered. If they’re in an accident out of town, the charges for their care might not be covered.

Originally Medicare didn’t pay for prescription drugs. In 2003, insurance companies started offering plans to cover the cost of some or all of drugs prescribed for a person. This is known as Medicare Part D. Enrollment in a Part D Plan is optional.

You Would Think with All These Plans, Medical Care Would Not Cost That Much. Sadly, That’s Not Correct

The first thing is there are costs for each of the plans.

For most people who paid Medicare taxes long enough while they were working, there is no cost for Medicare Part A. However, there is a deductible before hospital expenses are covered. In 2022 that deductible was $1,556. It increases to $1,600 on 2023.

People, who elect to have Medicare Part B, pay a monthly premium based on their income. In 2022, the minimum was $170.10. It decreases slightly to $164.90 in 2023. That is deducted from their monthly Social Security benefit,

Various insurance companies offer Medigap and Medicare Advantage plans. The monthly premiums for them vary based on the amount of benefits they offer. The premiums increase as people age because the probability of serious illnesses rise.

Various insurance companies offer Medicare Part D drug plans. Here the monthly premiums vary depending on the amount of the cost for drugs they cover.

The Amount of Coverage a Person Over 65 Has Depends Not Only on How Much They Think They Need But Also How Much They Can Afford to Pay for It

That’s where the problem comes in. People whose primary monthly income is their Social Security benefit and have limited savings cannot afford to have the same amount of coverage as a wealthier person.

A little over 13% of those over 65 in Knox County are living at or below the poverty level.

Many qualify for TennCare. This program helps paying for Medicare premiums and prescription drug costs. It also covers other expenses not reimbursed by Medicare – such as long-term care.

Another 29% of those over 65 have income greater than the poverty level but not high enough to afford basic household necessities. They don’t qualify for TennCare. They have a real challenge affording anything other than the minimal Medigap or Medicare Advantage programs.

They do not see their doctors on a regular basis for routine examinations and care. Normally they only get medical care when they absolutely need it. If they need extensive services, they typically do not have the ability to pay the cost for them.

Earlier I mentioned a typical 65 year old couple retiring in 2022 will spend anywhere from $315,000 to $662,000 for health care during the rest of their lives.

That is Deceiving

Most people over 65 are not typical. Their financial situation is not the same. They don’t have the same health concerns.

While medical expenses may average between $315,000 and $662,000, it may vary quite a bit from person to person. A person with good health may spend far less. It will cost the person with a severe medical condition far more.

Although there are no studies or statistics on this, those with the greatest medical expenses are probably those in the 29% group with income above the poverty level but not high enough to afford basic household necessities and those with very little savings. They probably only get care when they absolutely have to and the cost is much higher.

Tennessee is one of the worst states for life expectancy. It is 75.6 years. For men it’s 72.8 and women 78.5. Life span in Tennessee is ranked 47th in the country. In 2020 here were the leading causes of death:

• Heart Disease
• Cancer
• Covid-19
• Accidents
• Chronic Lower Respiratory Diseases
• Strokes
• Alzheimer’s, and
• Diabetes

The lives of those people who can’t afford to get routine medical care and only get care when absolutely necessary are shortened because they waited too long.

Think about Sue, the woman I mentioned earlier. Every month Sue gets bills in the mail from the hospitals and doctors who treated or will treat her. Although she has no way to pay them, she feels guilty about it.

• Do you think that increases her anxiety?

• Might she be depressed?

• What if her heart condition worsens?

• What if she has further back problems?

• Do you think she will get the care she needs?

On the basis of what we know about her, how likely will it be for Sue to live beyond her 79th birthday?

Janet’s situation is worse. Her condition is going to deteriorate. She will need costlier care. If she can’t pay her current bills, how likely will doctors or medical care facilities give her this care when they know she can’t pay for it?

On August 4, 2021, an article, “U.S. Health System Ranks Last Among 11 High-Income Countries,” by Marcia Frelick was published on the WebMD website. In that article, Marcia stated:

“Among contributors to the poor showing by the U.S. is that half (50%) of lower-income adults and 27% of higher-income adults say costs keep them from getting needed health care.”

Most of the 50% of the lower-income adults in that group are those over 65 who have income greater than the poverty level but not high enough to afford basic household necessities.

A Change Has to be Made

We feel this is the greatest country in the world. We probably will not live as long as those in other countries. The primary reason is the cost of health care we may need. Those really impacted are those with lower incomes.

You probably have a loved one or friend who died much earlier than they should have from a severe medical condition because they couldn’t pay for the care they needed. That never should have happened.

We need to correct this. We need to let everyone know what’s happening. Lack of ability to pay should not be a barrier keeping people from the medical care they need.

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If you have any comments on what you have read in this post, I would love to know them. Please email them to me. Also – if you have any ideas about subjects you would like to see discussed in future posts, please send me an email and let me know. My email address is bob.ooablog@gmail.com.