Cancer patients with only Medicare coverage face steep out-of-pocket costs, spending on average almost a quarter of their household incomes on treatment, according to a study published Wednesday.
The study by researchers at Johns Hopkins University found that Medicare beneficiaries without additional health coverage paid an average of $8,115 a year, or 23.7 percent of their incomes, on out-of-pocket costs after a cancer diagnosis. Some paid up to 63 percent of their incomes. Hospitalizations were the major factor for their high expenses, the researchers said.
Medicare beneficiaries with the lowest out-of-pocket costs also had coverage through Medicaid or the Veterans Health Administration. Their expenses were $2,116 and $2,367 a year, respectively. Seniors with additional coverage through employers had costs of almost $5,500, while those with private "Medigap” policies, which cover copays and deductibles not picked up by Medicare, had expenses of $5,670.
Beneficiaries in private Medicare plans — part of Medicare Advantage, which one-third of beneficiaries now choose — had costs of almost $6,000.
"The primary take-home message is that even in a population in which everyone has some health insurance, many people end up paying a significant share of their incomes in out-of-pocket expenses, and it might not be something they were planning for,” said study co-author Lauren Hersch Nicholas, a health economist at the Johns Hopkins Bloomberg School of Public Health.
The study, published in JAMA Oncology, is the latest look at "financial toxicity” — a term for the onerous burdens of escalating cancer-treatment costs. Its findings coincide with the intensifying post-election debate over the future not only of the Affordable Care Act but of big entitlement programs, such as Medicare, the federal health program for older or disabled Americans, and Medicaid, the federal-state program for poor Americans.
Some leading Republicans, including House Speaker Paul D. Ryan (R-Wis.), want to restructure both programs to slow their growth in spending and, they say, to ensure their long-term survival. Ryan has proposed providing fixed-dollar subsides to let seniors buy private insurance or coverage through regular Medicare. Critics, such as AARP, have warned that doing so could result in even higher costs for many individuals — a concern that Nicholas shares.
For the study on out-of-pocket costs, she and Amol Narang, a co-author and Hopkins instructor in radiation oncology, examined data for more than 18,000 Medicare beneficiaries who participated in a federally backed survey between 2002 and 2012. About 1,400 people were diagnosed with cancer during that period. About 15 percent had only traditional Medicare coverage.
The program has significant coverage gaps, including a deductible of almost $1,300 for hospital stays during a certain time frame. Nicholas said that she was surprised that out-of-pocket costs for Medicare Advantage plans were so high, given that they are often marketed as an economical alternative.
Oncologists need to be more aware of treatment costs and discuss the financial impact of treatment with their patients, Nicholas said. And Medicare should cap how much out-of-pocket costs a patient can be charged each year, she and Narang suggested. Many private health plans have such limits.
In an accompanying editorial, Jonas de Souza and Rena Conti of the University of Chicago said financial burdens can lead patients to delay or abandon treatment, which, in a worst-case scenario, can hasten death.
Scott Ramsey, a health economist at Fred Hutchinson Cancer Research Center in Seattle who was not involved in the study, noted that it "provides more evidence that older Americans are not very well protected from potentially severe financial stress when serious illnesses like cancer strikes. We could do more to protect this vulnerable population.”
The authors said that their research had important limitations. For one thing, it was based on self reporting by participants, which isn't always accurate. In addition, some of the high costs attributed to hospitalizations might have been because of inpatient administration of intravenous chemotherapy.