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FIGURE 3.1 – ELDERLY OUT-OF-POCKET (CONSUMER)
HEALTH CARE COSTS AS A PERCENTAGE OF
ELDERLY INCOME FOR 1977, 1980, 1984, 1987 AND
1988.

Elderly Out-of-Pocket Health Costs As A Percent of Elderly Mean Income

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ELDERLY OUT-OP-POCKET HEALTH COSTS AS COMPARED ΤΟ ELDERLY SOCIAL SECURITY PAYMENTS. Another way of looking at health care costs versus income is to compare out-of-pocket health costs with Social Security payments. As shown in Figure 3.2, annual average out-of-pocket health costs ($712) approximated three months worth ($729) of average Social Security payments (current payment status) in 1977. Eleven years later, the two figures were no longer close. In 1988, three months worth of Social Security payments totaled $1,611 while annual out-of-pocket health care costs totaled $2,394 -- 50 percent higher.

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TABLE 3.1 ELDERLY OUT-OP-POCKET (CONSUMER) HEALTH CARE COSTS FOR 1965, 1977, 1980, 1984 AND 1988.

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SOURCES: House Select Committee on Aging, October 1988; Health Care Financing Administration, July 1984 and October 1988; Census Bureau, 1988.

For the average senior citizen receiving Social Security, it is taking more and more of their Social Security checks to cover health and long term care costs. In 1977, the average senior citizen used just under three months worth of Social Security checks to cover his or her out-of-pocket health care costs. (See Figure 3.3) By 1988, it took the average senior citizen four and one-half months worth of Social Security checks to cover those health costs. For those elderly receiving less than the average Social Security check or having higher than average health and long term care costs, the situation is worse.

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FIGURE 3.2 - ELDERLY OUT-OF-POCKET (CONSUMER)
HEALTH CARE COSTS AS COMPARED TO THREE
MONTHS WORTH OF SOCIAL SECURITY PAYMENTS
(Average Monthly Benefits (Current-payment Status) for
Retired Workers) FOR 1977, 1980, 1984, 1987 AND 1988.

Elderly Out-of-Pocket Health Costs Compared To 3-Month Social Security Pay

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MEDICARE DEDUCTIBLES AND PREMIUMS COMPARED ΤΟ ELDERLY SOCIAL SECURITY PAYMENTS A different measure of health care cost pressures on the elderly are changes in elderly Medicare payments the Part A deductible and Part B premium. As noted earlier, the Medicare Part B deductible has not gone up as rapidly as elderly income and has been one small piece of good news in keeping costs affordable.

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FIGURE 3.3 ELDERLY OUT-OF-POCKET (CONSUMER)
HEALTH CARE COSTS EXPRESSED IN TERMS OF
NUMBER OF MONTHS OF SOCIAL SECURITY
PAYMENTS (Average Monthly Benefits (Current payment
Status) for Retired Workers) FOR 1977, 1980, 1984, 1987
AND 1988.

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In the case of the Medicare Part A hospital deductible, the increases have been substantial. (See Figure 3.4) As one indicator, the hospital deductible was $124 in 1977 roughly equivalent to one-half month's Social Security payment ($122) in that same year. Eleven years later, that same one-half month Social Security payment had grown to $269, a little over twice the 1977 level. During the same period, the Medicare Part A hospital deductible jumped to $540 over four times the level in 1977 and twice the one-half month Social Security payment for 1988.

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FIGURE 3.4

MEDICARE PART A HOSPITAL DEDUCTIBLE AS COMPARED TO ONE-HALF AVERAGE MONTHLY SOCIAL SECURITY BENEFIT FOR RETIRED WORKERS FOR 1977 THROUGH 1988.

Medicare Hospital Deductible As Compared

To One-Half Month Social Security Pay

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A similar pattern holds for the Medicare Part B premium as compared to Social Security payments. (See Figure 3.5) In 1977, the annual Part B premium was $92, substantially less than one-half of the monthly Social Security payment for 1977. By 1988, the annual Part B premium had risen to $298, substantially more than onehalf of the monthly Social Security payment.

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