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A full 95% of Medicare beneficiaries are anxious in regards to the impact of inflation on healthcare costs. And nearly half of the two,500 beneficiaries recently surveyed by eHealth say their healthcare costs have already increased as a result of inflation.
The survey, conducted before news of a possible compromise Senate bill to deal with drug costs under Medicare, also shows that 86% of seniors support government involvement in negotiating drug prices. Nine out of ten of those surveyed reside on a hard and fast income.
Those on fixed incomes are especially vulnerable to the impact of inflation on costs, the evaluation found, with the results almost immediate.
WHAT’S THE IMPACT
In the case of healthcare cost inflation, the highest two worries of Medicare beneficiaries are increased prescription drug costs and increased Medicare Part B premiums, each cited by 65% of respondents.
Meanwhile, 60% worry about higher copays and deductibles, and 57% worry about higher premiums for other types of Medicare coverage.
Seniors consider government involvement could help reduce costs – 88% say that reducing drug costs now would help lessen their worries about inflation. Amongst these, 40% say it could make “a giant difference, while 48% say it could make “some difference.”
Barely fewer, 86%, want more government involvement in reducing drug prices. Two percent say Medicare should in a roundabout way negotiate costs with drug firms, while 12% are unsure.
Many are financially vulnerable to higher premiums and drug costs. About half (49%) of Medicare beneficiaries say a rise of 10% or less of their Medicare premiums would make their coverage unaffordable; an identical figure (52%) say a rise of 10% or less would make their prescription drug costs unaffordable. Thirty percent say their Medicare premiums are already unaffordable for them.
THE LARGER TREND
Inflation can have some effect on provider costs, but provider payments typically lag behind the speed of inflation, meaning the actual effects will not be felt until later plan years, based on a July report from the American Academy of Actuaries. Still, workforce shortages could put upward pressure on provider payment rates.
Inflation has increased to levels not seen since 1982, the report found. Small business owners are finding it essential to extend employees’ wages and the costs they charge for his or her goods and services. It stays to be seen whether employers will stop offering coverage, reduce levels of coverage or decrease employer contributions to mitigate increases of their other business expenses. Any changes could vary by industry.
The actuaries said inflation’s impact is more likely to also extend to individual and small group premiums, and can affect providers’ supply chains – which can affect negotiations over rate agreements with health plans.
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