Various cost-sharing requirements and benefit limitations in the Medicare program leave beneficiaries vulnerable to high out-of-pocket costs. As a result, many elderly Americans fill these gaps in Medicare coverage with private supplemental insurance (so-called Medigap plans). However, even these individuals may face substantial out-of-pocket costs in the event of a catastrophic illness, depending on the generosity of their private supplemental plan.
A recent study supported by the Agency for Healthcare Research and Quality (HS09522) found that among elderly Americans with private Medigap insurance, those at risk for higher out-of-pocket costs had a greater chance of dying within 5 years than those at risk for lower out-of-pocket costs. This is similar to findings from previous studies of younger people in which adverse health outcomes were associated with financial barriers, such as lack of insurance and high copayments.
These findings suggest that decreased out-of-pocket health care expenditures may be associated with a reduced risk of premature death among elderly Americans, according to Jessica S. Banthin, Ph.D., and Carolyn M. Clancy, M.D., of the Agency for Healthcare Research and Quality. Drs. Banthin and Clancy and their coauthors Mark P. Doescher, M.D., M.S.P.H., from the University of Washington School of Medicine, and Peter Franks, M.D., of the University of Rochester, used data on 3,751 people aged 65 years and older with private supplemental insurance from the 1987 National Medical Expenditure Survey (a sample of the U.S. civilian population) which had been linked to the National Death Index.
The researchers found that after 5 years, 18.5 percent of people at low risk for high out-of-pocket expenditures, 22.5 percent of those at intermediate risk, and 22.6 percent of those at high risk had died. This pattern held while controlling for health status, chronic conditions, smoking status, age, sex, education level, poverty status, and other potential confounding factors.
The researchers call for more studies to identify which specific components of uncovered expenditures are associated with poor health outcomes among the elderly. For instance, individuals whose supplemental insurance plans do not include prescription drug coverage are likely to be at increased risk of high out-of-pocket costs.
For more details, see "Supplemental insurance and mortality in elderly Americans," by Drs. Doescher, Franks, Banthin, and Clancy, in the March 2000 Archives of Family Medicine 9, pp. 251-257.
Reprints (AHRQ Publication No. 00-R032) are available from the AHRQ Publications Clearinghouse.