Medicare is a critical source of health coverage for millions of older and disabled Americans. In case you're not quite familiar with how it works, here's a quick overview:
- Medicare Part A covers hospital visits, nursing facilities, and home health services.
- Medicare Part B covers preventative care services like doctor visits and diagnostic tests.
- Medicare Part C offers additional services through a network of private insurers.
- Medicare Part D covers prescription drugs.
Now that the basics are out of the way, here are some key statistics about the program that might surprise you.
IMAGE SOURCE: GETTY IMAGES.
1. An estimated 57 million people are enrolled in Medicare. That figure encompasses about 16% of the U.S. population, including seniors 65 and older as well as younger Americans with disabilities.
2. Medicare will have an estimated 92.8 million enrollees by the year 2050. But the program is inching its way toward a financial crisis of sorts. Medicare is currently funded by a combination of general revenues, payroll taxes, and enrollee premiums, among other sources. However, Part A is mostly funded by payroll taxes, and going forward, tax revenues may not suffice to cover the program's costs. According to the most recent Medicare trustee report, the program's trust funds will run out of money by 2030, at which point the program will rely even more heavily on taxes to stay afloat. Given the anticipated number of future enrollees, solving the program's fiscal woes is an absolute must.
3. The average Medicare household spends $4,722 a year on out-of-pocket medical costs. This figure is almost $2,000 higher than what non-Medicare households pay per year for medical expenses. In fact, healthcare costs make up 14% of the average Medicare household's budget.
4. Half of Medicare enrollees have incomes below $24,150 per person and savings below $63,350. While the program is designed to provide health benefits to seniors across all income levels, lower earners are particularly dependent on Medicare.
5. The majority of Medicare enrollees have health issues to contend with. In 2011, 66% of enrollees reported having three or more chronic medical conditions. Meanwhile, 27% of enrollees reported being in fair or poor health, while 31% suffered from some type of cognitive or mental impairment.
6. As of 2014, 13% of Medicare enrollees were 85 or older. While most Medicare enrollees live at home, 5% live in nursing homes or assisted-living facilities.
7. A good 31% of Medicare enrollees are also enrolled in a (Part C) Medicare Advantage plan. Medicare Advantage offers certain benefits over original Medicare, including expanded health services, health coverage outside the country, and annual out-of-pocket limits for enrollees. In fact, since 2004, the number of enrollees in Medicare Advantage plans has more than tripled from 5.3 million to 17.6 million in 2016.
8. Medicare Part A comes with a $1,316 deductible per benefit period in 2017. Though most people don't pay a premium for Part A, the out-of-pocket costs for services under Part A can be astronomical, particularly for older Americans living on a fixed income.
9. In 2014, more than 10% of Medicare's total budget was lost to fraud and improper payments. The program wasted roughly $60 billion that year -- money that could've otherwise padded its dwindling trust funds.
10. In 2014, the Medicare Rights Center in New York fielded 14,000 questions from confused enrollees. Though enrollment in the program is supposed to be simple, many applicants had difficulty navigating Part B in particular -- which is a problem, considering that late enrollment comes with a pretty steep penalty. Once you become eligible for Medicare, you must enroll within a seven-month period that starts three months before the month you turn 65 and ends three months after the month you turn 65. Fail to enroll during this window, and you might see your Part B premiums go up by 10% for every year you were eligible for Medicare but didn't enroll.
Medicare is a complicated but crucial program that more and more Americans are bound to rely on in the coming years. Whether you're currently enrolled in Medicare or expect to be eligible in the near future, it pays to read up on how Medicare works and learn more about your options for making the most of your benefits.
