How Medicare Shortchanges Women

(This is adapted from an article in the Summer 2015 issue of Generations, American Society on Aging’s quarterly journal.)

For 50 years, Medicare has played a critical role in promoting economic security for older women in the United States. (July 30, 2015 is the 50 anniversary of the day President Lyndon Johnson signed Medicare into law.) Today, Medicare provides 24 million women ages 65 and older with financial protection at a time in their lives when they have the greatest need for medical care and often the fewest family and economic resources.

There is no doubt the program has made a critical difference in the lives of millions of women. Gaps in coverage, however, — notably the lack of coverage for long-term-care services and supports (LTSS) and high out-of-pocket spending — continue to place a disproportionate burden on women. (Long-term services and supports either are provided at home by family and friends or through home- and community-based services, such as home health care, personal care, and adult day care or in formal institutional settings such as nursing homes or residential care facilities.)

These gaps still can lead to sizable and sometimes crushing financial burdens for many women and their caregivers. The gaps in Medicare benefits and cost-sharing requirements, together with spending for premiums for Medicare and supplemental coverage, result in high out-of-pocket expenses for many people and older women shoulder a disproportionate share of the cost.

There have been some notable improvements for women over the past 25 years. Medicare began routinely covering Pap smears in 1990 and covering screening mammography in 1991. Once it provided coverage for these services, however, Medicare required 20 percent co-insurance, which meant that women still could have significant out-of-pocket payments for these preventive services as well as for clinical breast exams, bone density tests, and pelvic exams — sometimes resulting in barriers to care.

The Affordable Care Act broadened coverage of recommended clinical preventive services under Medicare by eliminating cost sharing for mammograms, Pap smears and bone density screenings. Also included: no-cost coverage of a personalized health plan with an annual comprehensive risk assessment. For women, that’s comparable to a “well woman” visit.

But older women have higher rates of chronic illnesses than men, often with physical and cognitive impairments such as memory loss or dementia that limit functionality and hinder their ability to live independently. They also have lower median per capita income than men ($21,853 compared to $27,480) plus considerably lower median financial assets and retirement savings ($65,802 versus $93,371).

As women age and their health needs grow, these social challenges translate into greater need for informal and paid long-term-care services and supports.

Women ages 85 and older have considerably higher out-of-pocket medical costs than older men, largely due to their poorer health status, greater social isolation and dependence on paid long-term-care services and supports. Among women ages 85 and older, 60 percent have incomes below $20,000 per year, which could make the costs extremely difficult to shoulder.

Given their health needs and higher rates of living alone, women are more likely than men to need long-term-care supports and services. They represent about two-thirds of all residents of nursing homes and residential care communities. Furthermore, as women age, a larger share end up permanently residing in a long-term-care facility; one in five women ages 85 and older live in a long-term-care facility for a full year, twice the rate of their male counterparts.

Yet, Medicare offers time-limited coverage for long-term-care services provided in facilities or in the community, covering care only in the period following a hospitalization.

Only Medicaid and private long-term-care insurance pay for nursing home and home health services. This type of care is very expensive for older adults and their families. As a result, given the health and functional status of many older women, Medicare falls far short of meeting their long-term-care needs over time, and exposes many women (and their families) to high out-of-pocket costs when they can no longer live independently and require assistance for extended periods of time.

For many women, the absence of coverage for long-term care services and supports can expose them to crushing costs that cut into the limited resources available to them for basic needs like food and housing.

In the coming years, policymakers will continue to be faced with difficult choices about the structure of Medicare. In particular, solutions still are needed to address the lack of available financing for long-term-care services and supports — a policy priority for women, both as patients and as caregivers.

Focusing a gender lens on policy will help policymakers recognize that programmatic changes potentially reducing public costs and increasing out-of-pocket medical spending could have a disproportionate impact on older women, many with a limited capacity to absorb additional costs.