Older Patients Covered by Medicare Face High Out-of-Pocket Costs for Cancer Care

Out-of-pocket medical costs can reach one-quarter of an annual income for older patients with cancer who are covered by Medicare without supplemental insurance, according to a study published in JAMA Oncology.

Amol K. Narang, MD, and Lauren Hersch Nicholas, PhD, MPP, of the Johns Hopkins School of Medicine in Baltimore, Maryland, prospectively examined data from the Health and Retirement Study (a nationally representative panel study of U.S. residents >50 years old), which included 1,409 Medicare beneficiaries (median age = 73 years; range = 69-79 years) who were diagnosed with cancer between January 1, 2002, and December 31, 2012.

The type of supplementary insurance was associated with mean annual out-of-pocket costs, with those receiving Medigap insurance coverage having the highest burden:

  • $2,116 among those insured by Medicaid
  • $2,367 among those insured by the Veterans Health Administration
  • $5,976 among those insured by a Medicare health maintenance organization
  • $5,492 among those with employer-sponsored insurance
  • $5,670 among those with Medigap insurance coverage

Mean annual out-of-pocket costs were $8,115 among those insured by traditional fee-for-service Medicare but without supplemental insurance coverage.

Medicare beneficiaries with cancer incurred out-of-pocket expenditures that were 23.7 percent (mean) of their household income, though in 10 percent of cases, the out-of-pocket costs were as high as 63.1 percent of income.

Hospitalizations accounted for 12 percent to 46 percent of out-of-pocket cancer spending, depending on the type of supplemental insurance a patient had or if he or she had it at all.

“The health shock can be followed by financial toxicity,” said Dr. Nicholas in a news release discussing the study’s findings. “A lot of treatments are given without a discussion of the costs or the financial consequences.”

Source: Narang AK and Nicholas LH. Out-of-pocket spending and financial burden among Medicare beneficiaries with cancer. JAMA Oncol. 2016 November 23. [Epub ahead of print]

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