One in four Medicare beneficiaries age 65 and older live in rural areas, yet little research has looked at the out-of-pocket spending on health care of these individuals. This paper examines projections of supplemental insurance coverage and out-of-pocket health spending by rural Medicare beneficiaries according to their income. It also examines spending by type of health care expenditure (e.g., supplemental insurance premiums, prescription drugs, etc.). These projections are from the Medicare Benefits Model, a desktop microsimulation model that was developed for AARP by the Lewin Group using data from the Medicare Current Beneficiary Survey Cost and Use files. The presence and type of supplemental insurance-especially prescription drug coverage-greatly influence a beneficiary's level of out-of-pocket spending. In general, rural beneficiaries tend to have few private managed care (Medicare+Choice) plans available and are less likely to have employer-provided supplemental coverage, leading to greater reliance on private, unsubsidized Medigap plans. These Medigap policies tend to have higher premiums and less comprehensive benefits than employer-provided plans. The paper identifies which types of rural beneficiaries are most vulnerable to high out-of-pocket spending. Special attention is given to discussing the policy implications of these findings.
Learning Objectives: N/A
Keywords: Rural Health, Medicare
Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: None
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.