Medicare recipients with cancer face financial distress

Doctor checking on a senior patient at the ER close-up on a clipboard (iStock)

Older cancer patients in the U.S. often face high out-of-pocket costs that are a significant financial burden, according to a new study.

Medicare, the federal health insurance program for the elderly and disabled, establishes the fees doctors and hospitals are allowed to charge Medicare patients - but then generally only pays 80 percent of those fees.

Patients are left to cover the remaining 20 percent. Many people enroll in Medicare HMOs, or they buy so-called Medicare supplemental policies, to help cover the gap.

The new study found that Medicare patients without supplemental insurance face the highest financial stress, with expenses that total nearly a quarter of their household income, on average. For 10 percent of beneficiaries, out-of-pocket expenses can climb to more than 60 percent of their household income.

"Cancer care is becoming increasingly expensive in the U.S., but the financial impact on patients is not well understood," said study leader Amol Narang, from the Johns Hopkins School of Medicine in Baltimore.

"Consumers should understand that base Medicare or supplemental plans with high cost-sharing can put beneficiaries at significant risk for high out-of-pocket costs," he told Reuters Health.

"Pay close attention to the cost-sharing design of supplemental plans when making selections," he advises.

Narang and coauthor Lauren Hersch Nicholas looked at the Health and Retirement Study, a national survey of U.S. residents over age 50, to understand the financial strain that Medicare patients experience. Of the 18,000 Medicare beneficiaries in the study, 1,409 were diagnosed with cancer between 2002 and 2012.

Different types of supplemental policies were associated with different average out-of-pocket costs after a cancer diagnosis, the authors found.

On average, for example, patients with Medicaid paid $2,116, those insured by the Veterans Health Administration paid $2,367, those with employer-sponsored insurance paid $5,492, those with Medigap policies paid $5,670, those insured by a Medicare HMO paid $5,976, and those with traditional Medicare and no supplemental insurance paid $8,115.

The last group - those with Medicare alone - are the most vulnerable for significant costs, Narang said. More than four million Medicare beneficiaries lack supplemental insurance and may be unprepared for the costs that come with a major diagnosis.

Hospitalizations are a main driver of out-of-pocket costs, according to the research team.

"Medicare reform that restructures the benefits for hospital-based services and incorporates an out-of-pocket maximum may help alleviate financial burden," Narang and Nicholas wrote in JAMA Oncology. "In addition, interventions could reduce hospitalization."

In a commentary published with the study, Dr. Jonas de Souza of the University of Chicago said the findings illustrate a larger trend in which U.S. cancer patients of all ages face a financial burden following cancer diagnosis.

"Treatment for cancer is undergoing a renaissance," de Souza wrote. "However, the 'financial toxicity' of cancer treatment for U.S. patients and their families is a growing concern."

Annual medical expenses for cancer are projected to rise nearly 40 percent from 2010 to 2020, according to the National Cancer Institute, due to changing demographics, increased use of services and expensive new treatments. The new study indicates several areas for future research that may help cancer patients with costs, de Souza said, such as the availability of charitable aid.

"It is imperative that our health care system ensures patients access to the promise of dramatically improved quality of life without bankrupting their ability to pay for life's necessities," he wrote in his commentary.