Wallet, cash and stethoscopeBeneficiaries with poorer health, those with multiple chronicconditions, and those with any inpatient hospital use faced higherout-of-pocket costs than the average traditional Medicarebeneficiary. (Photo: Shutterstock)

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As the debate over Medicare for All rages on, a new study fromthe Kaiser Family Foundation (KFF) offers a timely reminder: ourcurrent Medicare system is far from perfect.

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The new study analyzes how much Medicare membersspend out of pocket on their health care. The study finds that2016, the average person with Medicare coverage spent $5,460 inout-of-pocket costs. This includes those in community-livingprograms and those in long-term care facilities.

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Related: A new explanation for why U.S. health care spendingis so high

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Not surprisingly, the age of the Medicare beneficiary plays alarge role in their average costs. Medicare members under 65 had$2,834 in out-of-pocket costs; those between 65 and 74 were at$5,021 annually. At ages 75 to 84, beneficiaries paid$5,829 on average, and those over 85 had average out-of-pocketcosts of $10,307. The high out-of-pocket costs for those over85—nearly double that of the next-oldest group—were due primarilyto out-of-pocket expenses for services at long-term-carefacilities, which are not covered by traditional Medicare.

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The study raises an important point about proposed Medicare for All plans: they would besignificantly more generous than the benefits under the currentsystem. "Current Medicare-for-all proposals in Congress and frompresidential candidates would largely eliminate out-of-pocket costsfor premiums and patient cost sharing, including for people nowcovered under Medicare," the report notes.

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The additional cost of expanding both benefits and coverage aspart of Medicare for All is a big part of why the proposals arecontroversial. As candidates are urged to show their math, thesticker shock that may come with a truly universal, single-payersystem has been used to argue that voters are not ready for changeon such a large scale. On the other hand, proponents argue thatonce the current system is replaced, overall health care costs will be lower.

Spending varies by type of beneficiary

The KFF report outlines how out-of-pocket costs can varysignificantly for different types of beneficiaries. Besides thequestion of age, differences arose in other areas as well:

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Out-of-pocket spending by women in traditional Medicare washigher than out-of-pocket spending by men ($5,748 versus$5,104).

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Beneficiaries with poorer health, those with multiple chronicconditions, and those with any inpatient hospital use faced higherout-of-pocket costs than the average traditional Medicarebeneficiary. "Beneficiaries with at least one inpatient stay in2016 spent $7,613 out of pocket, on average, compared to $5,044among those without an inpatient stay," the report said.

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Medicare supplemental plans made a difference: those with nosupplemental insurance spent more out of pocket than beneficiarieswith some type of supplemental coverage. "In 2016, nearly one infive (6.1 million) Medicare beneficiaries did not have any sourceof supplemental coverage, which placed them at greater risk ofincurring high medical expenses. People without any source ofsupplemental coverage were also more likely to have modest incomesand be ages 85 or older," the report said.

The unsettled future

The KFF study may lend ammunition to those who argue thatswitching to a Medicare for All system would simply bring too muchchange and too much uncertainty around funding. A recent study bythe Committee for a Responsible Federal Budget painted a picture ofMedicare for All being potentially unaffordable under severalscenarios.

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In addition, a new Health Affairs report also raises questionsabout the affordability of the Medicare system currently in place.That study found that more than half (54 percent) of seriously illMedicare beneficiaries said they'd experienced financial hardshipsdue to high costs of prescription drugs and hospital services.

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The KFF analysis noted that fixing the current affordabilityissues with Medicare will require more government spending, asidefrom any expansion that may happen in the future.

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"The fact that traditional Medicare does not have an annualout-of-pocket limit and does not cover certain services that olderadults are more likely to need may undermine the financial securitythat Medicare provides, especially for people with significantneeds and limited income," the study said. "Addressing these gapswould help to alleviate the financial burden of health care forpeople with Medicare, although doing so would also increase federalspending and taxes."

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