A Medicare rule has many seniors losing health coverage at the age of 65, specifically if they've previously relied on Medicaid for health insurance.
Around 280,000 Americans find themselves at risk after losing Medicaid because they must earn Medicare once they turn 65. It's what experts are calling the "Medicare Cliff."
"Many people are blindsided by the Medicare cliff," Chris Fong, a Medicare specialist and the CEO of Smile Insurance Group, told Newsweek. "The Medicare cliff is the moment when someone who is on Medicaid turns 65 and qualifies for Medicare the qualifications change. Some states add additional qualifications while lowering the income threshold to qualify."
Because of differences in Medicaid and Medicare policies, many seniors find themselves suddenly unable to afford the healthcare services they previously had and see their overall health decline, according to a study by the National Council on Aging (NCOA) and the LTSS Center.
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According to the NCOA, those who find themselves in this situation also tend to be women, and they often are unable to make ends meet to cover the healthcare services they need, leading to lower quality health in the long run.
The report found that 34 percent of the Medicare Cliff sample in 2012 reported their health as fair or poor. But by 2018, that percentage had moved to 48 percent.
Those at the Medicare cliff saw an average of $2,600 yearly in out-of-pocket medical costs, which increased up to $3,100 in two years.
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"Imagine you're cruising along a highway in an economy car, and suddenly you're forced to switch to a luxury vehicle with higher running costs," Michael Ryan, a finance expert and the founder of michaelryanmoney.com, told Newsweek. "That's essentially what happens to about 280,000 Americans each year."
Changing from Medicaid coverage to Medicare involves a slightly different set of requirements and policy options. While Medicaid aims to serve those with low incomes as well as pregnant women and people living with disabilities, Medicare has been the government healthcare for people aged 65 and older and who are typically retired and without their employer's health insurance.
Medicaid only covers adults aged 19 to 64, so upon turning 65, you'll need to rely on Medicare, despite the fact it doesn't cover all the costs you might have had under Medicaid.
"Many seniors start skipping doctor's appointments, rationing medications, or foregoing necessary treatments because they simply can't afford them," Ryan said. "I've seen peoples' health deteriorate within just two years of this transition."
The NCOA found the typical person at the Medicare cliff is a woman (58 percent) and retired with no job income (54 percent). Roughly one-third said they had fair or poor health, with a median household income of $35,900.
Under Medicaid, recipients generally only pay small copays, with everything else covered. Medicaid also offers coverage for nursing home care and other services Medicare usually leaves out.
"Many Americans are still under the assumption that when they reach the qualifying age, Medicare will take care of all their medical expenses," Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek. "The reality is there are a number of healthcare resources and services Medicaid and health insurance plans cover that aren't reimbursed through Medicare."
Last year, there were roughly 12.5 million people dually enrolled in Medicare and Medicaid, according to health research firm KFF.
Fong said the Medicare Cliff is one of the harder conversations he has with clients, as many seniors do not realize how much they will have to pay for healthcare costs because they no longer qualify for the full medical assistance Medicaid offers.
To fix this problem, some have pushed for Medicare to change its limits to match the limits for non-Medicare Medicaid programs, but so far, there's limited help for seniors in this situation. Others have proposed that traditional Medicare should cover supplemental services, like dental or vision insurance.
"I would encourage those who are on Medicaid and are approaching 65 to speak to their state's Medicaid department to know how their Medicaid will be affected when they turn 65," Fong said.
Beene echoed this statement: "Don't wait to see if what you need is covered. You should start formatting a game plan for coverage as your time for Medicare enrollment approaches. If you find something you depend on isn't covered, look into senior supplemental plans for additional coverage. They may cost a tad more out-of-pocket, but will pay themselves back in everything they assist in covering."
About the writer
Suzanne Blake is a Newsweek reporter based in New York. Her focus is reporting on consumer and social trends, spanning ... Read more
