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Uninsured Adults Increase Medicare Costs, Harvard Study Finds

Date:
July 13, 2007
Source:
Harvard Medical School
Summary:
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.
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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.

To account for the large differences between insured and uninsured adults in characteristics such as education and income levels, the researchers gave more statistical weight to insured subjects who closely resembled the uninsured group in education, income, and other characteristics than they did to insured subjects who were very different.

When the researchers compared these statistically similar groups, the differences due to insurance were clear. "After gaining Medicare coverage at age 65, health care use by previously uninsured adults not only rose to the level of previously insured adults but exceeded it substantially," says McWilliams. "These greater health care needs persisted at least through age 72."

These findings were especially noticeable in adults with cardiovascular disease or diabetes, illnesses that can be life-threatening when left untreated, but manageable if caught early. "This is a group for whom medical advances in recent decades have had an impressive impact on health. If people with diabetes, hypertension, or heart disease are uninsured, they often have to forego very cost-effective therapies," says McWilliams.

"Providing health insurance coverage for uninsured near-elderly adults may not only improve their health, but also reduce their annual health care use after age 65," he continues. "Particularly for those with cardiovascular disease or diabetes, these benefits are likely to be substantial and may partially offset the costs of expanding coverage."

This study was supported by the Commonwealth Fund and the Agency for Healthcare Research and Quality.


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Materials provided by Harvard Medical School. Note: Content may be edited for style and length.


Cite This Page:

Harvard Medical School. "Uninsured Adults Increase Medicare Costs, Harvard Study Finds." ScienceDaily. ScienceDaily, 13 July 2007. <www.sciencedaily.com/releases/2007/07/070712144615.htm>.
Harvard Medical School. (2007, July 13). Uninsured Adults Increase Medicare Costs, Harvard Study Finds. ScienceDaily. Retrieved December 4, 2024 from www.sciencedaily.com/releases/2007/07/070712144615.htm
Harvard Medical School. "Uninsured Adults Increase Medicare Costs, Harvard Study Finds." ScienceDaily. www.sciencedaily.com/releases/2007/07/070712144615.htm (accessed December 4, 2024).

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