Study finds high Medicare Advantage copays for hospital, nursing care

http://www.eurekalert.org/pub_releases/2015-06/bu-sfh060215.php

Public Release: 8-Jun-2015
Brown University

Millions of seniors with Medicare Advantage plans, including more than a million with low incomes, were on the hook to have large out-of-pocket costs for a 27-day course of hospital and skilled nursing care, according to a new study.

"Policymakers are very concerned about how much Medicare beneficiaries need to spend for essential medical services," said Dr. Amal Trivedi, associate professor of public health at Brown University and corresponding author of a new study in the June issue of the journal Health Affairs. "It's one of the goals of insurance -- to protect people from large, catastrophic out-of-pocket expenses."

Copays, or cost-sharing, can limit health care usage if the high out-of-pocket costs they engender discourage consumers from engaging certain services. In the new study the researchers focused on a sequence of services that is medically important, difficult to predict, expensive, and common.

What the data showed is that on average in 2011, seniors in Medicare Advantage plans that had lower premiums were expected to pay $1,785 for a week in the hospital and 20 days in skilled nursing, which are typical stays in the aftermath of catastrophic incidents such as stroke, congestive heart failure, or a hip fracture, Trivedi said. People in plans with higher premiums faced an average copay of $1,446.

Medicare Advantage copays were just as high for members who receive federal subsidies because their incomes are between the poverty level and 150 percent of poverty, added study lead author and Brown doctoral student Laura Keohane.

"For low-income beneficiaries, these copayments for inpatient and skilled nursing care could be more than a month's worth of income," Keohane said.

Seniors with traditional Medicare would pay a $1,132 for a week in the hospital and 20 days in skilled nursing, plus additional copayments for physician services while hospitalized.

"The perception out there is that Medicare Advantage offers more generous benefits than traditional Medicare without supplemental coverage but for long inpatient stays and long stays in a skilled nursing facility, that's generally not the case, we found," Trivedi said.

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