Bad debt related to Medicare patients is often the result of patients being unable to cover the costs of co-pays and deductibles. They need the care, so they seek it from the nearby hospitals or other healthcare facilities, but when the bill comes they do not have the cash to cover the costs. While some of this can be attributed to people living longer, failing to save enough to live comfortably in retirement, or losing much of their investments in the stock market crash, there is also a story to be found behind the pharmacy counters.
Unfortunately, 2018 will bring yet another hike in drug expenses for the average Medicare recipient. They will be facing more out-of-pocket cost, if they hope to get the medications they need to live healthy, productive lives. According to a recent analysis of the proposed CMS changes for FY2018, the rise in out-of-pocket drug costs is expected to be just 2% between 2017 and 2018, but with the expenses already being nearly out of reach for the average Medicare patient, medical facilities have to wonder how many of the patients are unable to get the prescriptions ordered for them. And, of those who are able to pay for the drugs, how many will, as a result, be unable to pay the out-of-pocket expenses of hospital care.
At the tail end of 2016, research suggested that the average Medicare patient was required to pay nearly $5,000 out-of-pocket for required medical care that year. This included, of course, medications. The median income for those eligible for Medicare was less than $25,000, which means that nearly 20% of the annual income would have to go toward medical care. When figuring in the potential for debt payments, insurance premiums, utilities, taxes, and groceries, it’s difficult to imagine that these individuals would be able to cover the $5,000 annually. When forced to choose which expenses will be paid first, most would choose to pay for the medication, rather than the hospital bills, which means more bad debt for those medical facilities.
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