Nearly 50% of Pre-Medicare Adults Worried About Healthcare Costs

January 08, 2019 - Forty-five percent of adults aged 50 to 64 are not confident that they will be able to afford healthcare coverage in retirement, according to a poll conducted by the University of Michigan Institute for Healthcare Policy and Innovation and sponsored by AARP and Michigan Medicine.  

Nearly 30 percent said they weren’t sure they would be able to afford their health insurance in the next year, and one in ten said they had thought about going without health insurance in 2019.

The poll included responses from 1024 adults approaching retirement age. Researchers conducted the survey in fall 2018, during the open enrollment period for many employers’ insurance plans, and near the start of open enrollment for Medicare and other plans available to individuals on federal and state marketplace sites.

The results indicated that the affordability of healthcare coverage is a major worry for older adults.  

In addition to concerns about spending, some respondents did not feel confident in their own financial literacy, which may exacerbate their worries about cost.

Twenty-one percent said they are only slightly confident or not at all confident in their ability to understand health insurance terminology, and 24 percent said they have little to no confidence in their ability to find out what is covered before they receive a healthcare service.

This knowledge is crucial for adults in their pre-Medicare years, noted Renuka Tipirneni, MD, MSc, a U-M health researcher.

“As people age into the years when many chronic diseases begin to take hold, and when they’re still years away from Medicare coverage, it’s important to talk with someone knowledgeable about all the options for coverage to bring down out-of-pocket costs and better navigate health care in this critical period,” she said.

In a separate study, Tipirneni and her colleagues examined the link between a person’s confidence in understanding their health insurance policy and their tendency to avoid healthcare because of cost. The team found that nearly 30 percent of insured adults older than 18 avoided seeking certain types of care because of potential costs.

Additionally, those who had the least confidence in their knowledge of health insurance terms were more likely to say they had avoided preventive or non-preventive care due to cost.

Many respondents in the U-M survey also said they were making decisions about the timing of their retirement based on their healthcare coverage.

Nearly two-thirds of those polled said their health insurance comes through their job or someone else’s job, and in the past year, 14 percent of older adults reported keeping a job specifically to have coverage through their employer. Eleven percent said they delayed or considered delaying retirement to keep employer-sponsored coverage.

Just eight percent of respondents said they buy their own coverage.

“The Affordable Care Act was intended to cut down on ‘job lock’, where a person feels trapped in their job by their need to preserve their health insurance,” said Preeti Malani, MD, director of the poll and a professor of internal medicine at the U-M Medical School.

“We were surprised by the low percentage of these adults who bought their own coverage through the ACA exchanges, and the relatively high percentage who felt they had to keep a job or delay retirement in order to keep a plan. Innovative policy solutions are needed to help adults in this age group navigate their insurance options.”

The results also showed that most pre-Medicare adults are thinking about the impact that federal policy changes could have on their health insurance.

Fifty percent said they closely follow news about possible changes to the ACA, Medicare, or Medicaid, and 68 percent said they were very or somewhat concerned about potential changes to their health insurance coverage due to federal policy changes.

These results demonstrate that despite improvements in healthcare coverage for older adults, there are still significant challenges that should be addressed.  

“This survey validates that healthcare coverage is a top concern of older Americans,” said Alison Bryant, PhD, senior vice president of research for AARP.

“The uninsured rate among the 50- to 64-year-old age group dropped 47 percent since implementation of the ACA, but we have to continue to improve access and affordability of health coverage for all older adults.”