For 'Near Poor' Seniors, Medicaid 'Cliff' Could Keep Health Care Out of Reach
The so-called "Medicaid cliff" is a perennial threat for millions of American seniors whose incomes put them just above the poverty line.
While impoverished seniors often have Medicaid to help cover their health care expenses, seniors who make just a little bit more have to pay the higher out-of-pocket costs of Medicare themselves.
The upshot: They're much less likely to go to the doctor or fill prescription medicines. And a new study blames this "cliff" for increasing racial and ethnic disparities, noting that Black and Hispanic adults whose annual income is just above the federal poverty level are more likely to experience cost-related barriers to care.
White seniors are more likely to have savings to draw on for out-of-pocket medical costs, researchers said.
“Chronic disease risks among older adults of color often go unaddressed due to cost-related barriers to care, and our research shows that this Medicaid cliff contributes to these barriers,” said researcher Eric Roberts, assistant professor of health policy and management at the University of Pittsburgh School of Public Health.
"Fixing this so that people on Medicare don't face substantially higher copays above the poverty threshold could lessen health care inequities among our nation's seniors," Roberts said in a university news release.
He offered a possible alternative.
“One option is to turn the ‘cliff' into a ‘gentle hill,' by tapering Medicaid assistance for seniors with incomes slightly above the federal poverty threshold,” Roberts said.
Medicare is the federal health care insurance program for folks who are 65 and older as well as individuals with disabilities. It has high cost-sharing, including deductibles and copays.
Medicare beneficiaries who make no more than about $14,600 a year receive supplemental Medicaid insurance to help them offset these costs. They also get a subsidy to lower out-of-pocket prescription drug costs.
While other federal programs taper off aid on a sliding scale, Medicaid cuts off recipients with incomes that are even slightly above the poverty line, according to the study.
For the study, researchers reviewed data on 8,144 Medicare beneficiaries, comparing health care use on either side of the Medicaid eligibility line. They also compared outcomes for white beneficiaries, Black recipients and Hispanic recipients.
The study tied being just above the poverty line, and therefore ineligible for Medicaid, to a 21% drop in annual outpatient visits.
Black people and Hispanic folks on Medicare also filled 15% fewer prescriptions, while the study found barely any change for white people.
“We found -- and other research supports -- that white beneficiaries are more likely to have savings to draw upon to cover medical costs,” Roberts said. “The income that the federal government looks at to determine Medicaid eligibility may make it appear that Black and Hispanic beneficiaries have the same ability as their white peers to pay for care. But the reality is that they don't have the same reserves -- and we're seeing the impact of that in their forgoing doctor's visits and needed medications.”
The study said Black beneficiaries and Hispanic beneficiaries are more likely than their white counterparts to have chronic diseases such as diabetes and heart disease that can be managed with medications.
The authors called for expanding Medicaid eligibility for older adults and tapering assistance above the poverty threshold. They said such moves could complement provisions in the Inflation Reduction Act that were designed to make drug costs more affordable for seniors.
Study findings were published April 10 in JAMA Internal Medicine.
The National Council on Aging has more on economic security and seniors.
SOURCE: University of Pittsburgh, news release, April 10, 2023