Since most senior citizens live on a fixed income, they provide an early indicator of when inflation starts to hurt and — worse — how it can force us to make life-or-death budget decisions.
A new survey of more than 2,500 Medicare beneficiaries shines a light on the plight of seniors in the era of 9% inflation. The survey, conducted by eHealth, reveals the striking impact inflation is having on healthcare costs for a large and vulnerable group of Americans.
Seniors are feeling the pain of inflation now
More than 95% of those surveyed say they worry about the impact of inflation on healthcare costs. Roughly half (49%) describe themselves as “very worried.” A similar figure (45%) say they are already feeling the bite of inflation in their personal healthcare expenses.
Read: Consumers pessimistic about inflation and the U.S. economy, sentiment poll shows
This might take the form of higher prices for over-the-counter medical supplies or the cost of transportation to and from doctor’s appointments. However, with inflation on an upward trajectory, more seniors are likely to feel the strain when Medicare plan premiums and copays are reset in January.
The top two concerns identified in the survey are higher prescription drug costs and Medicare Part B premiums (usually taken from beneficiaries’ Social Security checks). Each was cited by 65% of respondents. Six in 10 worry about higher copays and deductibles, while 57% worry about increasing premiums for their Medicare Advantage, Medicare Supplement (Medigap), or Medicare Part D plans.
Read:‘This is a daunting time to retire’: In the age of inflation, there are steps you can take to deal with higher prices
When do premiums and prescription costs become unaffordable?
How much wiggle room do seniors feel they have to accommodate higher healthcare costs? Not much.
Asked how much their monthly premiums would have to increase before becoming unaffordable, about half (49%) say an increase of 10% or less would break the bank, and 30% say monthly premiums are already unaffordable.
The picture is similar when you look at prescription drug costs. About half of respondents (52%) say an increase of 10% or less would render their coverage unaffordable. Among these, 26% say their out-of-pocket costs for prescription drugs are already unaffordable.
Seniors believe government can help reduce prescription drug prices
The eHealth’s survey, conducted before news of a possible compromise Senate bill to address drug costs for seniors, found that 88% of Medicare beneficiaries say reducing drug costs would meaningfully address their concerns about inflation. A similar figure (86%) want Medicare to directly negotiate with pharmaceutical companies.
How can industry help
Elected officials aren’t the only ones with a responsibility to help seniors weather the inflationary storm. Medicare is a partnership between the public and private sectors, and industry has a vital role to play.
In designing plans for 2023, insurers will need to get creative in balancing government benefit mandates against the medical needs of their members and the challenge of high inflation.
When Medicare’s nationwide open enrollment period arrives in October, licensed Medicare agents and brokers must recommit themselves to educating consumers and identifying the best match for their medical needs and budget. With many complex coverage options to choose from, personal advice from licensed agents is tremendously important to Medicare beneficiaries.
Seniors are sending up a distress flare
In sharp resolution, the survey captures the anxiety seniors feel about inflation and healthcare costs today. Forecasts vary, but many economists agree inflation is likely to continue, and may get worse.
America’s seniors are sending up a distress signal. Many are struggling under the burden of inflation already. U.S. healthcare is delivered by a balanced partnership between government and industry. It will take innovation and close cooperation to see our seniors through this crisis.
Fran Soistman is CEO of eHealth, Inc., a nationally licensed online health insurance marketplace for Medicare beneficiaries, individuals and families, and small businesses.