The Latest Trends in Income, Assets, and Personal Health Care Spending Among People on Medicare

The Latest Trends in Income, Assets, and Personal Health Care Spending Among People on Medicare

November 2015

Trends in Income and Assets Among People on Medicare

Exhibit 2

Half of all Medicare beneficiaries had incomes below $24,150 per person in 2014

25% had incomes below $14,350

50% had incomes below $24,150

5% had incomes above $93,000

1% had incomes above $163,600

SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2015.

http://www.kff.org/

Exhibit 3

NOTE: Total household income for couples is split equally between husbands and wives to estimate income for married beneficiaries. SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2015.

Median per capita income is lower for black and Hispanic beneficiaries than white beneficiaries, and declines with age among seniors, 2014

Race/ethnicity Age

Tota

l

Wh

ite

Bla

ck

His

pan

ic

Un

der

65

65-7

4

75-8

4

85 o

r o

lder

$24,150

$27,450

$16,150

$12,800

$17,050

$29,700

$24,800

$18,850

Exhibit 4

NOTE: Beneficiaries identified as “other” races not shown separately. SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2015.

Median per capita income is lower for black and Hispanic beneficiaries than white beneficiaries with the same education levels, 2014

$16,460 $12,178 $10,084

$23,641

$15,402 $14,160

$30,963

$19,352 $19,551

$43,603

$32,096

$26,156

White

Black

Hispanic

Less than High School

High School Graduate

Some College

College Graduate

Exhibit 5

$14,350 $16,200

$24,150 $28,450

$42,800

$51,550

$69,900

$84,600

$93,000

$113,650

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

2018 2023 2028

NOTE: All incomes are adjusted to 2014 dollars. SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2015.

Growth in per capita income is projected to be concentrated among beneficiaries with higher incomes, 2014-2030 In 2014 dollars

Year

50th percentile (Median)

25th percentile

75th percentile

90th percentile

95th percentile

2014 2020 2025 2030

Exhibit 6


Most beneficiaries have some savings, but a larger share of black and

Hispanic beneficiaries than white beneficiaries have no savings, 2014

White Black Hispanic

Share with savings

95%

No savings

Share with savings

80%

No savings

20%

Share with savings

76%

No savings

24%

41.1 million beneficiaries



5%

Share of all Medicare beneficiaries with no savings = 8%

Exhibit 7

Half of all Medicare beneficiaries had savings below $63,350 per person in 2014

25% had savings below $11,900

50% had savings below $63,350

5% had savings above $1,219,250

1% had savings above $3,585,350


8% had $0 in savings or were in debt

http://www.kff.org/

Exhibit 8

NOTE: Total household savings for couples is split equally between husbands and wives to estimate savings for married beneficiaries. SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2015.

Median per capita savings is significantly lower for black and Hispanic beneficiaries than white beneficiaries, and declines with age among seniors, 2014

Race/ethnicity Age

Tota

l

Wh

ite

Bla

ck

His

pan

ic

Un

der

65

65-7

4

75-8

4

85 o

r o

lder

$63,350

$91,950

$12,350 $9,800

$29,500

$95,300

$68,150

$30,700

Exhibit 9

$63,350 $102,800

$242,550

$357,250

$670,900

$921,750

$1,219,250

$1,570,600

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

2018 2023 2028

NOTE: All savings are adjusted to 2014 dollars. SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2015.

Growth in per capita savings is projected to be concentrated among beneficiaries with more savings, 2014-2030

In 2014 dollars

Year


75th percentile

90th percentile

95th percentile

2014 2020 2025 2030

Exhibit 10


Most beneficiaries have some home equity, but a larger share of black and Hispanic beneficiaries than white beneficiaries have none

White Black Hispanic

Share with home equity

82%

Share with home equity

57%

No home equity

43% Share with home equity

52%

No home equity

48%




No home equity

18%

Share of all Medicare beneficiaries with no home equity = 24%

Exhibit 11

Half of all Medicare beneficiaries had home equity below $65,500 per person in 2014

25% had home equity below $5,200

50% had home equity below $65,500

5% had home equity above $418,400

1% had home equity above $773,550


24% had $0 in home equity

http://www.kff.org/

Exhibit 12

NOTE: Total household home equity for couples is split equally between spouses to estimate home equity for married beneficiaries. SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2015.

Median per capita home equity is substantially lower for black and Hispanic beneficiaries than white beneficiaries, 2014

Race/ethnicity Age

Tota

l

Wh

ite

Bla

ck

His

pan

ic

Un

der

65

65-7

4

75-8

4

85 o

r o

lder

$65,500

$83,700

$13,300

$8,200

$13,100

$80,850 $80,700 $79,600

Exhibit 13

$65,500 $70,900

$157,150 $184,250

$298,050

$385,500 $418,400

$580,400

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

2018 2023 2028

NOTE: All home equity amounts are adjusted to 2014 dollars. SOURCE: Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2015.

Growth in per capita home equity is projected to be concentrated

among beneficiaries with more in home equity, 2014-2030

Year


75th percentile

90th percentile

95th percentile

2014 2020 2025 2030

In 2014 dollars

Trends in Personal Health Care Spending Among People on Medicare

Exhibit 15

51%

7% 6%

9%

27% Medicare

Medicaid

Employer

Other third party

Out of pocket

SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2011 Cost and Use file.

Medicare pays for half of beneficiaries’ total health care spending; beneficiaries pay more than one-fourth out of pocket on services and premiums

Traditional Medicare beneficiaries’ Average Total Health Care Spending, 2011 = $19,921

Exhibit 16

49% $2,605

16%

12%

10%

6% 5% 3%

51% $2,763

NOTE: Analysis excludes beneficiaries enrolled in Medicare Advantage plans. Premiums includes Medicare Parts A, B, D, and other types of health insurance beneficiaries may have. Post-acute care includes skilled nursing facility and home health. SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2011 Cost and Use file.

Premiums are nearly half of Medicare beneficiaries’ out-of-pocket health spending; LTC facility costs are the largest component of spending on services

Average Total Out-of-Pocket Spending on Services and Premiums, 2011: $5,368

Long-term care facility

Medical providers and supplies

Prescription drugs

Dental

Inpatient/outpatient

Post-acute care

Premiums Services

Exhibit 17

$2,459 $2,730

$1,241

$2,764 $3,089 $3,015

$2,571 $2,927

$2,133

$1,888

$2,787

$6,491 $5,031

$5,657

$3,374

$4,652

$5,876

$9,507

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

Men Women Under 65 65-74 75-84 85+

Services

Premiums

NOTE: Analysis excludes beneficiaries enrolled in Medicare Advantage plans. Premiums includes Medicare Parts A, B, D, and other types of health insurance beneficiaries may have. SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2011 Cost and Use file.

Average out-of-pocket spending on services is higher for women on Medicare than men and increases with age

Exhibit 18

$3,038 $2,990 $2,684 $2,011 $1,667

$1,610 $1,908 $2,856 $4,268 $3,942

$4,648 $4,899

$5,541

$6,279

$5,610

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Excellent Very good Good Fair Poor

Services

Premiums

Average out-of-pocket spending on services is higher for Medicare beneficiaries in poorer self-reported health


Exhibit 19

$2,794 $2,519 $1,897 $2,455 $2,535 $2,704 $2,573

$1,679 $2,812

$7,689

$1,226 $2,110

$2,909 $3,574

$4,473

$5,331

$9,587

$3,680

$4,646

$5,613 $6,148

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

None 1-2 ADLs 3+ ADLs None 1-2 3-4 5+

Services

Premiums


Average beneficiary out-of-pocket spending rises with the number of functional impairments and chronic conditions

# of Chronic Conditions # of Functional Impairments

Exhibit 20

$1,003 $1,999

$2,933 $2,997 $3,067 $3,382 $2,162

$2,991

$3,299 $2,620 $2,640

$2,617

$3,166

$4,990

$6,232 $5,617 $5,707

$5,999

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

<$10,000 $10,000- $20,000

$20,000- $30,000

$30,000- $40,000

$40,000- $50,000

$50,000+

ServicesPremiums

Beneficiaries with incomes between $20,000-$30,000 pay somewhat more out of pocket than others; those with incomes of $20,000 or less pay less overall due to lower premiums


Exhibit 21

34%

29%

17%

9%

5% 4%

2% 1%

Medical providers/supplies

Prescription drugs

Dental

Outpatient hospital

Inpatient hospital

Home health


Skilled nursing facility

NOTE: Analysis excludes beneficiaries enrolled in Medicare Advantage plans. Excludes premium spending. SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2011 Cost and Use file.

For community-dwelling beneficiaries, providers and supplies accounts for one-third of average out-of-pocket service spending, followed by prescription drugs and dental services

Average Out-of-Pocket Service Spending among Community Residents, 2011: $1,881

Exhibit 22

86%

7% 4%

1% 1% <1% <1% <1%


Skilled nursing facility

Medical providers/supplies

Inpatient hospital

Outpatient hospital

Prescription drugs

Dental

Home health

NOTE: Analysis excludes beneficiaries enrolled in Medicare Advantage plans. Excludes premium spending. SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2011 Cost and Use file.

For long-term care facility residents, the largest component of average out-of-pocket service spending is LTC facility costs

Average Out-of-Pocket Service Spending among Facility Residents, 2011: $18,936

Exhibit 23

$563

$1,790

$3,615

$6,408

$10,433

$116 $387 $1,006

$2,370

$5,389

$216 $808

$1,662

$3,731

$5,916

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

10th percentile

25th percentile

Median 75th percentile

90th percentile

Total Service spending Premium spending


One-fourth of Medicare beneficiaries spent at least $6,400 out of pocket on services and premiums in 2011; 1 in 10 spent at least $10,400

Exhibit 24

$585 $1,710

$3,108 $5,002

$5

$15

$58

$3,595

$313 $914

$1,689

$4,633

$903

$2,639

$4,855

$13,229

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

Bottom quartile 2nd quartile 3rd quartile Top quartile

Other services*


Premiums

Long-term care facility costs are a major component of spending for beneficiaries in the top quartile of total out-of-pocket spending

NOTE: Analysis excludes beneficiaries enrolled in Medicare Advantage plans. Premiums includes Medicare Parts A, B, D, and other types of health insurance beneficiaries may have. *Other services includes dental, home health, inpatient and outpatient hospital, medical providers/supplies, prescription drugs, and skilled nursing facility. SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2011 Cost and Use file.

Exhibit 25

$880 $933 $854 $762 $766 $774 $886 $908 $804 $828 $855 $875

$452 $439 $502 $588 $744 $617 $681 $675 $722 $706 $644 $637

$436 $473 $502 $523 $541

$547 $506 $518 $517 $547 $514 $520

$191 $192 $187 $208 $219

$224 $236 $268 $281 $278 $302 $298

$203 $285 $276 $350

$293 $304

$341 $382 $325 $328 $430 $434

$2,161 $2,323 $2,321

$2,430 $2,564

$2,466 $2,651

$2,750 $2,649 $2,687 $2,744 $2,763

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


Medical providers and supplies

Prescription drugs

Dental services

Other services*

NOTE: Analysis excludes beneficiaries enrolled in Medicare Advantage plans. *Other services includes skilled nursing facility, home health, and inpatient and outpatient hospital services. SOURCE: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2000-2011 Cost and Use files.

Beneficiaries’ out-of-pocket spending on medical and long-term care services increased at an average annual rate of 2.3% between 2000 and 2011

Exhibit 26

NOTE: Numbers may not sum to total due to rounding. SOURCE: Kaiser Family Foundation analysis of Bureau of Labor Statistics Consumer Expenditure Survey, 2014.

Health insurance premiums accounts for the largest component of average health care spending by Medicare households

Health care

spending

14.8%

Health insurance (71% of health spending)

$3,776 10.5%

$858 2.4%

$526 1.5% $181 0.5%

Other household spending

85.2%

Average Total Household Spending, 2014:

$36,080 Average Health Care Spending, 2014:

$5,342

Medical services (16% of health spending)

Prescription drugs (10% of health spending)

Medical supplies (3% of health spending)

Exhibit 27

14.5% 14.8%

8.3%

10.5%

2.2% 2.4%

3.5%

1.5% 0.5% 0.5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Total healthspending

Healthinsurance

Medicalservices

Prescriptiondrugs

Medicalsupplies

SOURCE: Kaiser Family Foundation analysis of Bureau of Labor Statistics Consumer Expenditure Survey, 2002-2014.

Insurance premiums have accounted for a growing share of Medicare households’ total spending since 2002; the share of spending on prescription drugs has steadily decreased

Exhibit 28

$3,410

$1,967

$515 $814

$115

$5,342

$3,776

$858 $526

$181 $0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

Total health spending

Health insurance

Medical services

Prescription drugs

Medical supplies

2002 2014


Health insurance spending by Medicare households increased nearly two-fold between 2002 and 2014; drug spending fell

Exhibit 29

SOURCE: Kaiser Family Foundation analysis of Bureau of Labor Statistics Consumer Expenditure Survey, 2014.

Medicare households spent more on health care than non-Medicare households in 2014

Transportation Transportation

7%

15%

33%

35%

15%

15%

17%

15%

28%

21%

Health care Housing Food Transportation Other

Medicare households

Non-Medicare households

$5,342 $12,468 $5,400 $5,277 $7,593

$3,511 $17,855 $8,070 $9,479 $15,316

Total = $36,080

Total = $54,232

Exhibit 30

3.8%

5.6% 4.3%

-3.6%

3.9%

5.6%

8.2%

2.3%

-0.3%

2.2%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Total health spending

Health insurance

Medical services

Prescription drugs

Medical supplies

Medicare households Non-Medicare households


Medicare households experienced a steeper drop in the average annual rate of drug spending and a smaller increase in premium spending than non-Medicare households between 2002 and 2014

Exhibit 31

Income and Assets of Medicare Beneficiaries, 2014-2030

Wide Disparities in the Income and Assets of People on Medicare by Race and Ethnicity: Now and in the Future

How Much Is Enough? Out-of-Pocket Spending Among Medicare Beneficiaries: A Chartbook

Health Care on a Budget: The Financial Burden of Health Spending by Medicare Households

Medicare’s Income-Related Premiums: A Data Note

Resources on Medicare Beneficiaries’ Income, Assets, and Health Care Spending at kff.org/medicare

Health & Medicine

The Latest Trends in Income, Assets, and Personal Health Care Spending Among People on Medicare