A growing share of Medicare beneficiaries’ income was spent on health care, with median out-of-pocket health spending up from 11.9 percent of income in 1997 to 15.5 percent in 2003, according to a new study published in the November-December 2007 issue of Health Affairs. The study found that about four in 10 beneficiaries spent at least one-fifth of their income on health care in 2003. The top 10 percent of beneficiaries spent more than half of their income on health care.
Using data from the Medicare Current Beneficiary Survey, the study found that growth in out-of-pocket health spending outpaced growth in income over time. Between 1997 and 2003, median out-of-pocket health spending increased by $1,116--a 50 percent increase, while median individual income rose by just 15 percent. Premiums for Medicare and supplemental insurance were the largest component of the increase, followed by payments for medical care providers and services.
Spending on prescription drugs accounted for a relatively small share of total out-of-pocket health spending in 2003 (13.7 percent), but accounted for 18.1 percent of the out-of-pocket spending increase between 1997 and 2003. The authors note that it is too early to determine the effect of the Medicare Part D drug benefit on the overall financial burden of healthcare spending by Medicare beneficiaries. Read the abstract.
