June 1, 2005
The high cost of poverty
When Republicans talk Medicaid reform, they suggest raising copayments, reducing the benefits that Medicaid covers—or both. After all, Medicaid beneficiaries pay next to nothing, right? Wrong. From the Center on Budget and Policy Priorities:
Data from the Medical Expenditure Panel Surveys show [that] poor adult Medicaid beneficiaries paid an average of $210 in 2002 for out-of-pocket medical expenses. Non-low-income adults with private insurance paid an average of $548. Because the average income of a poor adult Medicaid beneficiary is about one-ninth the average income of privately insured adults who are not low income, Medicaid beneficiaries pay substantially more as a share of income than middle- and upper-income people do. Moreover, because poor people have far less discretionary income (after paying for basic needs like food and rent) than people with higher incomes, the effective burden that out-of-pocket medical expenses impose is greater for people on Medicaid than these statistics portray.
We also analyzed the out-of-pocket expenses of disabled Medicaid beneficiaries who receive Supplemental Security Income benefits and have incomes below the poverty line. Disabled SSI beneficiaries on Medicaid bear heavier out-of-pocket costs. Due to their more serious health problems, they require more health care and incur greater expenses, including more copayments. In 2002, poor disabled SSI beneficiaries covered by Medicaid spent an average of 5.6 percent of their incomes on out-of-pocket medical expenses, more than twice the percentage of income that non-disabled adult Medicaid beneficiaries paid, and about eight times the percentage of income paid by non-low-income adults with private insurance.
The out-of-pocket costs of Medicaid beneficiaries are not only high, but increasing. Expenses for adult beneficiaries who are not elderly or disabled and have incomes below the poverty line (currently $16,090 for a family of three) grew by an average of 9.4% annually from 1997 to 2002, the most recent year for which data are available. That’s twice as fast as their incomes, which grew by only 4.6% a year. Over the same period, out-of-pocket costs for prescription drugs soared by 14% a year for adult Medicaid beneficiaries who are not elderly or disabled, 17% for adult Medicaid beneficiaries with disabilities—and 10% for people with private insurance. And the squeeze continues:
According to the Kaiser Commission on Medicaid and the Uninsured, four states raised Medicaid copayments in 2002, seventeen states increased them in 2003, twenty states raised them in 2004, and nine states plan to do so in 2005. Similarly, nine states reduced the scope of Medicaid benefits in 2002, eighteen states lowered benefit cover-age in 2003, nineteen states did so in 2004, and nine states plan restrictions in 2005.
So the poorer and sicker you are, the harder you get hit. Nothing new there, I guess.
TrackBack URL for this entry: