FFS Medicare May Boast Lower Cost Barriers than Private Medicare

Adults ages 65 and older with traditional Medicare boasted similar access to care and a lower rate of cost barriers to care when compared with privately-insured seniors between the ages of 50 and 64, a Kaiser Family Foundation (KFF) report revealed.

“High and rapidly growing health care spending in the U.S. is a concern for consumers, employers, tax payers and policy makers,” the researchers began. “The relatively high prices paid by private insurers is one of the key factors fueling this trend, leading some policy makers to consider whether Medicare rates, or a multiple of Medicare rates, should be used to help control costs and address affordability concerns for people with private insurance.”

The study used 2018 Medicare Current Beneficiary Survey and the 2019 National Health Interview Survey to assess the differences in quality and costs of care for traditional Medicare beneficiaries and privately-insured seniors.

Approximately 16 percent of privately-insured seniors reported experiencing cost barriers. The cost issues resulted in these seniors either delaying or avoiding medical care.

In contrast, 11 percent of traditional Medicare beneficiaries said that they experienced cost issues that resulted in care delay or avoidance.

Although the gap was present between these two populations overall, it was particularly evident in the segment of each population that was n poor health. Around 33 percent of privately-insured seniors who were in fair or poor health—as opposed to good, very good, or excellent health—indicated that they had a least one affordability barrier.

As health deteriorated and the number of coexisting chronic diseases that a population experienced grew, the cost barriers increased for those in privately-insured coverage.

Of those who had no chronic conditions under private coverage, 10 percent had affordability challenges. But 14 percent of those with one to two chronic conditions, a quarter of those with three to four chronic conditions, and 42 percent of those with five or more chronic conditions reported facing cost-related barriers.

Meanwhile, 20 percent of traditional Medicare beneficiaries who reported fair or poor health said that they struggled with their care’s affordability.

The highest reported cost barrier in this population was for individuals with five or more chronic diseases. Nearly one in five of these individuals (19 percent) stated that they had faced financial barriers to care—less than half the share of the privately-insured seniors with five or more chronic diseases.

Additionally, racial care disparities existed both within and between the traditional Medicare and populations with private payer coverage.

The rate of concern about affordability was higher for both White individuals and Hispanic seniors with private payer coverage than in traditional Medicare. There was no significant difference in affordability between the two coverage options for the Black community.

While these differences exist and present a significant distinction between the main public and private coverage options, over nine in ten Medicare beneficiaries overall reported that they were satisfied or very satisfied with their quality of care and provider network.

“Our analysis finds that most adults ages 65 and older with Medicare have relatively good access to care and are satisfied with the quality of the care they receive, consistent with previous analyses. Additionally, adults ages 65 and older with Medicare report comparable access to care as privately-insured adults between 50 and 64,” the researchers explained.

“These findings suggest that lower Medicare reimbursement rates relative to private insurance do not generally inhibit the ability of adults ages 65 and older to receive health care services.”

These results sync with previous studies indicating that Medicare increased both access to care and affordability for seniors.

A study published in Health Affairs found that, once enrolled in Medicare, access to care barriers dropped by 50.9 percent and affordability barriers decreased by 46 percent. These researchers also discovered racial care disparities similar to those found in the KFF study.

Still, however, privately-insured seniors do have advantages. Separate studies have also indicated that Medicare Advantage members may have a lower cost burden than those in fee-for-service Medicare.