How much does Out-of-Pocket Medical Spending Eat Away at Retirement Income?

TitleHow much does Out-of-Pocket Medical Spending Eat Away at Retirement Income?
Publication TypeReport
Year of Publication2017
AuthorsMcInerney, M, Rutledge, MS, King, SEllen
Series TitleWorking Papers
Pagination2-31
Date Published10/2017
InstitutionCenter for Retirement Research at Boston College
CityBoston, MA
KeywordsGender Differences, Income, Medicare, Social Security
Abstract

The adequacy of retirement income – from Social Security benefits and other sources – is substantially reduced by Medicare’s high out-of-pocket (OOP) costs. This project uses the 2002-2014 Health and Retirement Study to calculate post-OOP benefit ratios, defined as the share of either Social Security benefits or total income available for non-medical spending. The project decomposes the share of income that is going toward premium payments and services delivered and examines how these post-OOP benefit ratios differ by age, gender, income, supplemental insurance coverage, and health status. The project also updates previous studies’ estimates to document how OOP spending and the post-OOP income ratios changed following the introduction of Medicare Part D prescription drug coverage in 2006 and the closing of the “donut hole” coverage gap in 2010, which decreased OOP costs under Part D for those spending moderate amounts on prescriptions.

URLhttp://crr.bc.edu/working-papers/how-much-does-out-of-pocket-medical-spending-eat-away-at-retirement-income/
Citation Key9610