Health Care Costs Pushing Some Seniors into Debt

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Health Care Costs Pushing Some Seniors into Debt

American seniors are filing for bankruptcy in record numbers. According to a recent article in "USA TODAY"* a Harvard study found that nearly half of all seniors who end up in bankruptcy say they filed because of a medical reason. Many of them live on little more than Social Security. The drop in the stock market, and low interest rates on CDs and savings accounts, have put a big dent in retirement plans. Tapped out, seniors are turning to credit cards to finance medical bills and expensive prescription drugs. "USA TODAY" reports that household debt for those 65 and older is skyrocketing--up 164% on average in eight years. Although seniors account for a small proportion of total personal bankruptcy filings, they are the fastest growing group.

A report by the Commonwealth Fund found that out-of-pocket health care costs for seniors increased nearly 50% from 1999 to 2001.* More employers have eliminated health insurance, which often provides supplemental drug coverage. During this same period, many Medicare Health Maintenance Organizations (HMOs) either cut prescription benefits or withdrew from Medicare altogether.

These disturbing trends are a clear warning that Congress can no longer postpone action, yet House Republicans only narrowly pushed through a prescription drug bill (see story “Prescription Drug Plans Moving Through Congress”). As action now shifts to the Senate the debate will not just be about cost, but what role the government should have in managing benefits and controlling costs. If the Senate version passes, about two months remain for lawmakers to determine whether they can, or want to work out their differences.

Your contact with your Members of Congress now comes at a critical time. We urge you to write, call, fax or e-mail your Members of Congress and ask that they enact legislation that provides Medicare prescription drug benefit. Or, sign our online petition at http://action.tscl.org/VolMedicarePresDrugCoverage.asp. We also urge you to register to vote if you have recently moved. Come election day, you will be able to hold your lawmakers accountable for relief from high health care costs.

* American Seniors Rack Up Debt Like Never Before. Medical Expenses Often Feed the Cycle," Christine Dugas, "USA TODAY," April 26, 2002.

July 2002