While the overall cost-effectiveness of Medicare benefits have been much-debated, new data now show that people who were uninsured before receiving benefits at age 65 required more intensive and costlier care than those who had been privately insured prior to receiving Medicare.
These findings, from researchers at Harvard Medical School (HMS), appear in the July 12 issue of the New England Journal of Medicine .
“The implication is that expanding coverage to uninsured near-elderly adults may not cost as much as previously thought,” says J. Michael McWilliams, an HMS research associate and practicing general internist at Brigham and Women's Hospital. “Particularly for those with heart disease, hypertension, or diabetes, earlier access to effective treatments can prevent costly complications and reduce health care needs after age 65.”
Created in 1965, Medicare now covers nearly 43 million elderly and disabled Americans. In 2006, the program's cost of $374 billion accounted for 14 percent of the federal budget, and federal spending on Medicare is expected to grow to $524 billion by 2011. According to the Kaiser Family Foundation, Medicare spending as a share of GDP is estimated to increase from 2.7 percent to 4.7 percent by 2020 as a larger percentage of the population survives well beyond age 65.
Despite the size of the program, Medicare may still not be helping enough people. “The expansion of Medicare coverage to uninsured adults before the age of 65 has been proposed in Congress in recent years, in part because if adults have chronic conditions in their late 50s and early 60s, it's very difficult for them to obtain private insurance on their own,” says John Z. Ayanian, HMS associate professor of medicine and of health care policy and a practicing general internist at Brigham and Women's Hospital. “Even if they're eligible for private insurance, it can be prohibitively expensive.”
McWilliams and Ayanian, along with colleagues in the HMS Department of Health Care Policy, conducted a study comparing previously uninsured to insured adults to see how each group used health services before and after entering Medicare.
Using data from a national survey, the Health and Retirement Study, the researchers followed 5,158 adults who were ages 53 to 61 in 1992 for 12 years (through 2004). They compared health care use and expenses for 3,773 subjects who were insured and 1,385 who were uninsured before 65. The survey also captured information on dozens of different characteristics, from subjects' exercise habits to depression symptoms.