Medicare Patients Without Supplemental Insurance Face Highest Cancer Costs

Medicare beneficiaries who develop cancer and don’t have supplemental health insurance, have higher out-of-pocket costs for their treatments, according to a recent study published in JAMA Oncology.

“The spending associated with a new cancer diagnosis gets very high quickly, even if you have insurance,” Lauren Hersch Nicholas, PhD, MPP, one of the study authors and an assistant professor in the department of health policy and management at the Bloomberg School. “The health shock can be followed by financial toxicity. In many cases, doctors can bring you back to health, but it can be tremendously expensive and a lot of treatments are given without a discussion of the costs or the financial consequences.”

According to the study, on average, cancer treatment contributes more to health care costs than treatment for any other disease. It is estimated that annual out-of-pocket costs range from $2116 to $8115 with hospitalizations as a major cost contributor. The researchers stated that inpatient hospitalizations account for between 12% to 46% of out-of-pocket costs, and inpatient care is often necessary.

For the study, researchers looked at data from more than 18,000 Medicare beneficiaries who were interviewed between 2002 and 2012, biennially for the Health and Retirement Survey. Researchers obtained data from more than 1409 people who received a cancer diagnosis. Fifteen percent of the study population consisted of patients with Medicare alone, 50% with a Medigap plan or other supplemental coverage, 20% with a Medicare HMO, 9% with Medicaid, and 6% with veteran’s affairs benefits.

According to the results of the study, researchers found that the overall average out-of-pocket costs associated with a new cancer diagnosis were $2116 for Medicaid beneficiaries; $2367 for the VA; $5492 for those with employer-sponsored plans; $5670 for those with Medigap; $5976 for those with a Medicare HMO; and $8115 for those without supplemental insurance of any kind. The researchers said that total costs often average one-quarter of their income with some paying as high as 63%.

“Cancer costs are high, and a significant segment of our seniors who don't have adequate insurance coverage can be hit hard by this,” Amol Narang, MD, of the department of radiation oncology and molecular radiation sciences at the Johns Hopkins School of Medicine, said in a press release. “In addition to efforts aimed at lowering cancer costs, we need to think about how to offer our seniors better insurance coverage.”

Dr Nicolas added that the financial burden can oftentimes be as debilitating as the physical recovery.

“We should expect to spend some of our income on health care,” Dr Nicholas said. “But many people are unprepared to spend more than a quarter of their income treating a single disease. The physical disease is terrible and then you have to figure out how to deal with the economic fallout associated with paying to treat it.”

—Julie Mazurkiewicz

References:

Narand A, Nicholas LH. Out-of-Pocket Spending and Financial Burden Among Medicare Beneficiaries With Cancer [published online November 23, 2016]. Jama Oncol. doi:10.1001/jamaoncol.2016.4865.

Medicare beneficiaries face high out-of-pocket costs for cancer treatment [press release]. EurekAlert!. November 23, 2016.