A 75-year-old man with type 2 diabetes and hypertension presented to his physician with fatigue and constipation. His complete blood count showed a low hemoglobin level and evidence of iron deficiency; colonoscopy revealed a sigmoid colon mass. He had missed a routine screening colonoscopy appointment 3 years ago, but a prior colonoscopy approximately 15 years ago had been unremarkable. He subsequently underwent surgical resection of the mass, which was found to be a T3N1M0 adenocarcinoma of the sigmoid colon. His surgical course was complicated by a wound infection but he has been continuing to recover slowly from his hospitalization. His daughter has been helping with his wound care and dressing changes. His oncologist recommends adjuvant chemotherapy with a 6-month course of oral capecitabine, and he leaves the clinic with a prescription, along with instructions for proper use of the medication.
Up until now, he has been purchasing his antihypertensives and diabetes medications online from a Canadian pharmacy and has therefore not enrolled in a Medicare Part D prescription plan. His wife died 3 years ago from breast cancer, and he lives with his daughter and son-in-law. He does receive monthly Social Security checks. Alhough he has a small amount of savings left, much of it was depleted by expenses related to his wife’s cancer.
After checking online, he discovers that a 1-month supply of capecitabine will cost approximately $2,000, which he knows he cannot afford. He decides not to mention this to his daughter, since she has been so worried after her husband lost his job a month ago. He calls the nurse at the oncologist’s office to tell her that he is not interested in adjuvant chemotherapy, but that he will come back for routine checkups. A follow-up appointment is scheduled in 3 months.
About a year later, he develops pain on the right side of his abdomen. A computed tomography (CT) scan shows extensive metastases to the liver. Systemic chemotherapy is recommended, and he is now going to the oncologist’s office every 2 weeks to receive FOLFOX + bevacizumab. He develops significant neuropathy and nausea from chemotherapy. He has been taking his nausea medications only when the nausea is severe, because the medication is quite expensive. Because his neuropathy has worsened, his daughter now has to drive him to all of his clinic appointments and chemotherapy appointments. Because of side effects from chemotherapy, he does not have the energy to play with his grandkids. He feels nauseated, tired, and sad most of the time. He feels guilty and wishes he could just “slip away.”
Old age is typically a period of declining income and increasing health care expenditures. For example, Americans older than 85 who do not have cancer have household incomes 47% lower and out-of-pocket health expenditures 77% higher than those between 55 and 65 years of age. Between these two age groups, out-of-pocket health expenditures increase from 3% to 9% of household income ( Table 30-1 ).
| Age | Income | Total Expenditures | Out-of-pocket | |||
|---|---|---|---|---|---|---|
| Not Cancer | Cancer | Not Cancer | Cancer | Not Cancer | Cancer | |
| 55 – 65 | $33,065 | $33,122 | $4,264 | $15,705 | $894 | $1,762 |
| 65 – 75 | $24,045 | $25,359 | $5,396 | $13,585 | $1,037 | $1,408 |
| 75 – 85 | $19,551 | $20,408 | $7,047 | $12,773 | $1,296 | $1,656 |
| ≥ 85 | $17,522 | $18,817 | $7,741 | $12,172 | $1,586 | $1,945 |
The economic realities can be even harsher for those older Americans who suffer from cancer. Out-of-pocket health expenditures are 32% higher for cancer patients over age 65 than for people in this age group without cancer. The Consumer Bankruptcy Project (CBP) found that 10% of families of all ages that filed for bankruptcy due to medical reasons cited cancer as their main illness. These higher economic burdens borne by elderly cancer patients persist in spite of a high percentage of health insurance coverage for this age group relative to younger people (99.6% vs. 86.4%).
To understand the special economic problems encountered by older cancer patients, an examination of the patchwork system of insurance coverage in the United States is necessary. In addition, any discussion of the economic burdens of older cancer patients should include the costs incurred by relatives and other uncompensated caregivers. This chapter describes the coverage system under Medicare and Medicaid for the majority of older adults in the United States, focusing on potential sources of high out-of-pocket expenses for patients with cancer. Average out-of-pocket expenditures for older patients with and without a cancer diagnosis are described using data from the Medical Expenditures Panel Survey (MEPS). MEPS is a nationally representative survey of medical expenditures by households and individuals that has been conducted by the Agency for Healthcare Research and Quality (AHRQ) every year since 1996. Finally, the costs and burdens borne by family members of elderly patients with cancer are explored.
Health Insurance Benefits and Costs
Medicare
Medicare covers 98.9% of all Americans age 65 and older. It is available to all those who qualify for Social Security benefits and is by far the largest health insurer in the U.S. There are four major parts of Medicare coverage. Part A covers hospitalization (excluding physician fees), home health, hospice, and a limited number of days of nursing home care. Part B covers physician fees and outpatient care. Part C is a managed care option operated by private companies and covers the same expenses (and sometimes more) that Parts A and B cover. Part D covers prescription drugs.
Most Medicare enrollees do not pay any premiums for Part A coverage, but do pay a deductible ($1,068 in 2009) and coinsurance (from $0 to $534 per day in 2009, depending on the length of stay) for each hospital stay. The few who do pay premiums (i.e., people who do not qualify for Social Security, also known as voluntary Part A beneficiaries) are charged $443 per month for basic coverage. Medicare also pays for part or all, up to the first 100 days (in a lifetime), of long-term hospitalization or nursing home care. Specifically, Medicare pays for all of the first 20 days and the enrollee must pay $133.5 per day for stays between 21 and 100 days.
Because of the limits to Part A coverage, the greatest exposure to high out-of-pocket expenses for Part A enrollees comes from hospital stays that last for more than 60 days and nursing home stays that last for more than 20 days. For example, a 120-day hospital stay would generate $25,000 of expenses not covered by Medicare and a 100-day nursing home stay will generate $10,000 in noncovered expenses. Long nursing home stays are quite common. 8.5% of all nursing home residents over the age of 65 have a diagnosis of cancer and 72.6% of those cancer patients have stays that last longer than 100 days. With an average monthly charge of $4,290 in 2004, the out-of-pocket cost of a long nursing home stay can be financially devastating.
Part B beneficiaries pay a monthly premium of $96.40—more if their individual income is over $85,000 per year. In addition to the monthly premium, Part B beneficiaries pay an annual deductible of $135 plus 20% of all Part B payments to providers. Medicare Part B facility payments are determined by prospective payment systems that dictate the payment for each type of patient visit. Physician fees paid by Medicare are determined by the resource-based relative value scale (RBRVS).
Part C (Medicare Advantage) is an optional type of insurance coverage that Medicare beneficiaries can substitute for Part A, Part B and Part D coverage. These plans are administered by private insurance companies, mainly health maintenance organizations (HMOs) and preferred provider organizations (PPOs). As of 2009, 23% of Medicare enrollees are covered by Medicare Advantage plans. Medicare pays the plan administrators approximately 15% more per enrollee than it pays for fee-for-service enrollees. This relatively generous payment system is responsible for the increased participation in Medicare Advantage plans by private insurers in 2003. This increased competition has attracted many enrollees to Medicare Advantage plans, but is a source of controversy.
Part D, implemented in 2006, provides coverage for prescription drug costs. Enrollees pay a minimum monthly premium of $24.80, a $180 to $265 annual deductible and 25% of full drug costs up to $2,400. Once out-of-pocket expenses reach $3,850, the enrollee pays only 5% of additional drug costs. The range of uncovered drug costs is known as the “donut hole”, a gap in coverage. In 2008, the coverage gap was $3,216 for plans offering the standard Medicare Part D benefit; by 2019, it is projected to be nearly $6,000.
Medicaid
Medicaid covers 8.7% of all Americans age 65 and older who are actively treated for cancer. Each state determines its own terms of eligibility for Medicaid c overage but, in general, Medicaid is intended to cover the indigent population. Consequently, Medicaid coverage does not normally require premiums, deductibles, or coinsurance payments. Indeed, Medicaid often pays the Medicare premiums, deductibles, and coinsurance payments for people who are enrolled in both Medicare and Medicaid.
In 2008, Medicaid physician fees were 72% of Medicare physician fees. Consequently, Medicaid’s fee payments are so low that some physicians claim to not accept new Medicaid patients. This could result in less access to health care for Medicaid patients; however, this access problem for Medicaid enrollees may be less acute for cancer patients than for other types of patients. In a 2006 survey of physicians who accepted new patients, only 4% of oncologists responded that they did not accept new Medicaid patients, while none responded that they did not accept new Medicare patients. Primary care physicians and other specialists responded that 18% did not accept new Medicaid patients and 12% did not accept new Medicare patients.
Importantly, Medicaid covers nursing home expenses. Since Medicare coverage ends after 100 days, many long-term nursing home residents must deplete their life savings before becoming eligible for Medicaid. For nursing home residents over the age of 65 with a diagnosis of cancer, 34% are covered by Medicaid at the start of a stay that lasts for more than 100 days; however, the percentage jumps to 65% by the end of the stay.
Medicare
Medicare covers 98.9% of all Americans age 65 and older. It is available to all those who qualify for Social Security benefits and is by far the largest health insurer in the U.S. There are four major parts of Medicare coverage. Part A covers hospitalization (excluding physician fees), home health, hospice, and a limited number of days of nursing home care. Part B covers physician fees and outpatient care. Part C is a managed care option operated by private companies and covers the same expenses (and sometimes more) that Parts A and B cover. Part D covers prescription drugs.
Most Medicare enrollees do not pay any premiums for Part A coverage, but do pay a deductible ($1,068 in 2009) and coinsurance (from $0 to $534 per day in 2009, depending on the length of stay) for each hospital stay. The few who do pay premiums (i.e., people who do not qualify for Social Security, also known as voluntary Part A beneficiaries) are charged $443 per month for basic coverage. Medicare also pays for part or all, up to the first 100 days (in a lifetime), of long-term hospitalization or nursing home care. Specifically, Medicare pays for all of the first 20 days and the enrollee must pay $133.5 per day for stays between 21 and 100 days.
Because of the limits to Part A coverage, the greatest exposure to high out-of-pocket expenses for Part A enrollees comes from hospital stays that last for more than 60 days and nursing home stays that last for more than 20 days. For example, a 120-day hospital stay would generate $25,000 of expenses not covered by Medicare and a 100-day nursing home stay will generate $10,000 in noncovered expenses. Long nursing home stays are quite common. 8.5% of all nursing home residents over the age of 65 have a diagnosis of cancer and 72.6% of those cancer patients have stays that last longer than 100 days. With an average monthly charge of $4,290 in 2004, the out-of-pocket cost of a long nursing home stay can be financially devastating.
Part B beneficiaries pay a monthly premium of $96.40—more if their individual income is over $85,000 per year. In addition to the monthly premium, Part B beneficiaries pay an annual deductible of $135 plus 20% of all Part B payments to providers. Medicare Part B facility payments are determined by prospective payment systems that dictate the payment for each type of patient visit. Physician fees paid by Medicare are determined by the resource-based relative value scale (RBRVS).
Part C (Medicare Advantage) is an optional type of insurance coverage that Medicare beneficiaries can substitute for Part A, Part B and Part D coverage. These plans are administered by private insurance companies, mainly health maintenance organizations (HMOs) and preferred provider organizations (PPOs). As of 2009, 23% of Medicare enrollees are covered by Medicare Advantage plans. Medicare pays the plan administrators approximately 15% more per enrollee than it pays for fee-for-service enrollees. This relatively generous payment system is responsible for the increased participation in Medicare Advantage plans by private insurers in 2003. This increased competition has attracted many enrollees to Medicare Advantage plans, but is a source of controversy.
Part D, implemented in 2006, provides coverage for prescription drug costs. Enrollees pay a minimum monthly premium of $24.80, a $180 to $265 annual deductible and 25% of full drug costs up to $2,400. Once out-of-pocket expenses reach $3,850, the enrollee pays only 5% of additional drug costs. The range of uncovered drug costs is known as the “donut hole”, a gap in coverage. In 2008, the coverage gap was $3,216 for plans offering the standard Medicare Part D benefit; by 2019, it is projected to be nearly $6,000.
Medicaid
Medicaid covers 8.7% of all Americans age 65 and older who are actively treated for cancer. Each state determines its own terms of eligibility for Medicaid c overage but, in general, Medicaid is intended to cover the indigent population. Consequently, Medicaid coverage does not normally require premiums, deductibles, or coinsurance payments. Indeed, Medicaid often pays the Medicare premiums, deductibles, and coinsurance payments for people who are enrolled in both Medicare and Medicaid.
In 2008, Medicaid physician fees were 72% of Medicare physician fees. Consequently, Medicaid’s fee payments are so low that some physicians claim to not accept new Medicaid patients. This could result in less access to health care for Medicaid patients; however, this access problem for Medicaid enrollees may be less acute for cancer patients than for other types of patients. In a 2006 survey of physicians who accepted new patients, only 4% of oncologists responded that they did not accept new Medicaid patients, while none responded that they did not accept new Medicare patients. Primary care physicians and other specialists responded that 18% did not accept new Medicaid patients and 12% did not accept new Medicare patients.
Importantly, Medicaid covers nursing home expenses. Since Medicare coverage ends after 100 days, many long-term nursing home residents must deplete their life savings before becoming eligible for Medicaid. For nursing home residents over the age of 65 with a diagnosis of cancer, 34% are covered by Medicaid at the start of a stay that lasts for more than 100 days; however, the percentage jumps to 65% by the end of the stay.
Total and Out-of-Pocket Health Expenditures
The costs of cancer care to Medicare are substantial and vary by tumor site, phase of care, stage at diagnosis, and survival. Costs are greatest in the initial year of treatment and in the final year of treatment and also increase with stage. Older patients being treated for cancer—regardless of their insurance status—face significantly higher out-of-pocket and total health expenditures than patients without cancer. From 1996 to 2006, annual total health expenditures for members of this age group being treated for cancer were more than double those for members not being treated for cancer ($14,812 vs. $7,003). Out-of-pocket expenditures for these two groups averaged $1,772 and $1,335, respectively—a 33% increase from the noncancer group. Although the difference in total health expenditures is due mainly to expenditures for office visits, hospitalization, and outpatient visits, the single largest component of the difference in out-of-pocket expenditures is for prescription drugs, $896 vs. $738. Over this time period, half of total drug expenditures for older cancer patients were paid out-of-pocket. Only 7% of other types of health expenditures are paid out-of-pocket. Table 30-2 provides complete figures.
| Category | Expenditures | |||||
|---|---|---|---|---|---|---|
| Without Cancer | With Cancer | Difference | ||||
| Out-of-pocket | Total | Out-of-pocket | Total | Out-of-pocket | Total | |
| Drugs | $738 | $1,437 | $895 | $1,771 | $157 | $334 |
| Office visits | $138 | $1,247 | $247 | $3,232 | $110 | $1,985 |
| Home health | $90 | $569 | $133 | $867 | $43 | $298 |
| Hospitalization | $33 | $2,321 | $67 | $5,371 | $34 | $3,050 |
| Outpatient | $20 | $427 | $41 | $1,816 | $21 | $1,389 |
| Other | $316 | $1,002 | $388 | $1,755 | $73 | $753 |
| Total | $1,335 | $7,003 | $1,772 | $14,812 | $437 | $7,809 |
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