A full 95% of Medicare beneficiaries are worried about the impact of inflation on healthcare costs. And nearly half of the 2,500 beneficiaries recently surveyed by eHealth say their healthcare costs have already increased due to inflation.
The survey, conducted before news of a possible compromise Senate bill to address drug costs under Medicare, also shows that 86% of seniors support government involvement in negotiating drug prices. Nine out of ten of those surveyed are living on a fixed income.
Those on fixed incomes are especially vulnerable to the impact of inflation on costs, the analysis found, with the consequences almost immediate.
WHAT’S THE IMPACT
When it comes to healthcare cost inflation, the top 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 forms of Medicare coverage.
Seniors believe government involvement could help reduce costs – 88% say that reducing drug costs now would help lessen their worries about inflation. Among these, 40% say it would make “a big difference, while 48% say it would make “some difference.”
Slightly fewer, 86%, want more government involvement in reducing drug prices. Two percent say Medicare should not directly negotiate costs with drug companies, while 12% are unsure.
Many are financially vulnerable to higher premiums and drug costs. About half (49%) of Medicare beneficiaries say an increase of 10% or less in their Medicare premiums would make their coverage unaffordable; a similar figure (52%) say an increase 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 may have some effect on provider costs, but provider payments typically lag behind the rate of inflation, meaning the real effects may not be felt until later plan years, according to 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 necessary to increase employees’ wages and the prices they charge for their goods and services. It remains to be seen whether employers will stop offering coverage, reduce levels of coverage or decrease employer contributions to mitigate increases in their other business expenses. Any changes could vary by industry.
The actuaries said inflation’s impact is likely to also extend to individual and small group premiums, and will affect providers’ supply chains – which may affect negotiations over rate agreements with health plans.
The recent Senate budget reconciliation bill put forward by Senate Majority Leader Chuck Schumer, D-NY, and Sen. Joe Manchin, D-WV, aims to cut medication costs for millions of Americans and reduce drug spending by the federal government.
The Senate will hold a vote on the Inflation Reduction Act of 2022, also known as the fiscal year 2022 budget reconciliation legislation, this week, Senate Majority Leader Chuck Schumer, D-N.Y., said Friday.