PITTSBURGH, April 5, 2021 – “Nearly poor” Americans – people just above the federal poverty line but still well below the average American income – who depend on Medicare for health insurance face high medical bills and may forgo essential health care, according to new research by health policy scientists at the Graduate School of Public Health at the University of Pittsburgh. This is due to “cliff top” coverage in Medicaid, which supplements Medicare for people with incomes below poverty, but excludes people above the federal poverty line, including the near poor.
In a report published today in the April issue of the journal Health affairs, the authors describe the effects of this cliff and propose solutions to remedy it, with the aim of reducing the obstacles to care among near-poor people benefiting from health insurance.
“Medicaid provides life-saving assistance to low-income people on Medicare by covering high Medicare out-of-pocket expenses and filling gaps in Medicare coverage. However, Medicaid eligibility rules for low-income older Americans have changed little in 30 years, barely exclude above poverty, and make it difficult to enroll people below poverty. As a result, many older Americans who live on modest incomes find it difficult to afford care, ”said senior author Eric T. Roberts, Ph.D., assistant professor in the Department of Politics and Policy. health management from Pitt Public Health. “We are overdue in modernizing the Medicaid program for the elderly. The solutions we offer incorporate consumer accountability while creating substantial improvements in health insurance coverage and access to care.”
Near-poor are those with incomes between 100% and 200% of the federal poverty line, or $ 12,880 to $ 25,760 for a single person in 2021. About 30% of the Medicare population – in general, people aged 65 or over, and young people with disabilities – are almost poor. Medicare provides health insurance, but there are always reimbursable costs, such as deductibles, copayments, and premiums. Medicaid – which provides health coverage for low-income people – can serve as supplemental insurance for eligible Medicare beneficiaries, covering these out-of-pocket costs.
But near-poor people who receive Medicare are generally not eligible for Medicaid, which means they have to purchase alternative supplemental insurance or pay Medicare costs out of pocket. Recent estimates suggest that 40% of near-poor Medicare beneficiaries spend at least a fifth of their income on health care costs.
Roberts and his team analyzed a diverse sample of 4,602 Medicare beneficiaries with incomes below double the federal poverty line, over several years between 2008 and 2016.
They found that 73.3% of Medicare beneficiaries whose incomes were just below the Medicaid eligibility threshold had supplemental health insurance coverage from Medicaid or another source, while only 47.5% of the near-poor had such additional coverage. The researchers define this 25.8 percentage point difference as “the blanket cliff.”
Near-poor beneficiaries affected by this coverage cliff incurred $ 2,288 in additional health care costs over two years and were 33.1% more likely to spend more than a month of income on health care costs than their counterparts below. poverty line.
The team then looked at measures of health care utilization and found that the near-poor used 55% less ambulatory and preventive health services and filled fewer prescriptions per year, including fewer prescription drugs. chronic diseases.
“These are the types of medications and doctor’s appointments that help people manage their condition and avoid expensive hospital care,” said Roberts. “But, more importantly, previous research has shown that these drugs and doctor’s appointments can save lives.”
Roberts and his colleagues suggest several solutions to mitigate the Medicaid coverage cliff, namely:
- Extend additional Medicaid coverage to Medicare beneficiaries who earn at least 150%, and preferably 200%, of the federal poverty line.
- Offer this coverage on a sliding scale so that beneficiaries do not pay more than a fixed proportion of their income over Medicare costs.
- Simplify the Medicaid application process for the elderly, which is currently much more complex than the application process for children and non-elderly adults.
- Expand options for eligible Medicare beneficiaries to enroll in the Medicare Part D “Low Income Grant” to reduce prescription drug costs.
“As the US population ages, analysts predict a 40% growth in the Medicare population and more than a third of Medicare beneficiaries will have low to moderate incomes, making modernizing Medicaid even more important now. Roberts said.
The other authors of this research are Alexandra Glynn, Noelle Cornelio, Julie M. Donohue, Ph.D., Walid Gellad, MD, MPH and Lindsay M. Sabik, Ph.D., all of Pitt; and J. Michael McWilliams, MD, Ph.D., Harvard University and Brigham and Women’s Hospital.
This research was funded by grants from the Agency for Research and Quality in Healthcare (K01HS026727) and the Pitt Pepper Older Americans Independence Center (sub-grant of the National Institute on Aging grant P30 AG024827-13 ).
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About the University of Pittsburgh Graduate School of Public Health
The Graduate School of Public Health at the University of Pittsburgh, founded in 1948 and today one of the top-ranked schools of public health in the United States, conducts research in public health and medical care that improves the lives of millions of people around the world. Pitt Public Health is a leader in developing new methods to prevent and treat cardiovascular disease, HIV / AIDS, cancer and other significant public health problems. For more information about Pitt Public Health, visit the school’s website at http://www.publichealth.pitt.edu.
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