Medicare beneficiaries without supplemental insurance experience highest out-of-pocket cancer costs

Which Medicare beneficiaries shoulder the highest out-of-pocket costs after a cancer diagnosis? The answer is those beneficiaries without supplemental insurance, according to a new article published online by JAMA Oncology.

Ensuring the financial security of elderly patients with cancer requires an understanding of which patients experience high out-of-pocket costs and which services contribute to these costs.

Amol K. Narang, M.D., of the Johns Hopkins School of Medicine, Baltimore, and colleagues analyzed survey data for 18,166 Medicare beneficiaries who participated in waves of the Health and Retirement Study, a nationally representative survey of U.S. adults older than 50, from 2002 through 2012. During the study period, 1,409 participants (7.8 percent) were diagnosed with cancer; their median age was 73 and almost 54 percent were male.

Average annual out-of-pocket expenses for all Health and Retirement Study participants were $3,737. A new diagnosis of cancer or a common chronic noncancer condition was associated with increased odds of incurring higher costs, according to the report.

The type, or lack, of supplementary insurance was associated with average annual out-of-pocket costs incurred after a cancer diagnosis, the authors report. Those survey participants with private supplemental insurance, without supplemental insurance or with Medicare benefits through an HMO all had increased odds of higher out-of-pocket costs compared with beneficiaries with Medicaid or Veterans Health Administration coverage.

The average annual out-of-pocket costs following cancer diagnosis for Medicare beneficiaries were $2,116 with Medicaid coverage; $2,367 with Veterans Health Administration coverage; $5,492 with employer-sponsored insurance; $5,670 with Medigap; $5,976 with a Medicare HMO; and $8,115 with traditional fee-for-service Medicare with no supplementary coverage, the authors report.

Hospitalizations were the primary reason for higher out-of-pocket costs, the report notes.

Medicare beneficiaries with a new cancer diagnosis and Medicare alone had average out-of-pocket costs that were almost 24 percent of their household income. In addition, about 10 percent of beneficiaries had out-of-pocket costs that topped 63 percent of their total household income, according to the article.

Limitations of the study include that out-of-pocket expenditures were self-reported by patients.

"Proposals for Medicare reform that restructure the design of benefits for hospital services and incorporate an OOP [out-of-pocket] maximum may help alleviate the risk of financial burden for future beneficiaries, as can interventions that reduce hospitalizations in this population," the study concludes.