“Social Security Giveth, Medical Costs Taketh Away,” by Michelle Andrews, Kaiser Health News
“Retirees spent on average more than a third of their Social Security benefits on out-of-pocket medical costs in 2014, according to a recent study. Even after factoring in other sources of income, medical spending still took a substantial 18 percent bite out of seniors’ total retirement income, the study found.
“In dollar terms, the typical retiree spent $4,274 per year on medical costs, not including long-term care. Insurance premiums accounted for about two-thirds of that total, according to the study, published this month by the Center for Retirement Research at Boston College. . . .
“McInerney [an associate professor of economics at Tufts University and a study co-author] said she was surprised at the findings, however, when the team did incorporate spending on long-term care and found little difference in spending between seniors who needed those services and those who didn’t. Survey respondents who said they or their spouse lived in a long-term care facility or received home health care services spent 19.2 percent of their total income on medical care, versus 17.8 percent for those who didn’t need long-term care.” [Emphasis added.]
LTC Comment (from Stephen A. Moses, President, Center for Long-Term Care Reform):
Very interesting, but not surprising. Since insurance premiums account for most of seniors’ medical costs and few seniors have LTC insurance (so don’t pay premiums) and most people who need LTC get it paid for by Medicaid, why would anyone expect factoring in LTC costs to add much financial burden? This is further evidence Medicaid took “skin in the game” out of long-term care financing for consumers and thus crowded out the market for LTC insurance.
Social Security Giveth, Medical Costs Taketh Away