ELDERLY FACING HEALTH-COSTS SQUEEZE

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, February 26, 1992                   TAG: 9202260091
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A3   EDITION: METRO 
SOURCE: The Washington Post
DATELINE: WASHINGTON                                LENGTH: Medium
ELDERLY FACING HEALTH-COSTS SQUEEZE
The nation's elderly are spending far more of their after-tax incomes on health-care costs in 1991 than 30 years ago, even with the rise of Medicare, according to an analysis released Tuesday by Families USA, an advocacy group.
"Medicare has helped our parents and grandparents, but despite Medicare, older Americans today are being squeezed much harder by health costs than during John F. Kennedy's time," said Ron Pollack, the group's executive director.
In 1960, when Kennedy campaigned for Medicare (which passed in 1965), Pollack said, "he argued that older Americans needed help because health costs were eating up a tenth of their income." Now the proportion has risen to one-sixth.
Pollack said the average elderly household is spending $3,305 on out-of-pocket costs for insurance premiums, Medicare premiums, co-payments and deductibles on bills paid by their insurance, and on things like drugs and long-term care in nursing homes that are not covered by Medicare. In 1961, that figure was $1,589, as measured in 1991 dollars.
The analysis showed that by far the biggest single increase in costs was for nursing-home care. In 1961, the average elderly household was spending $287 (in 1991 dollars), but by 1991 the figure had increased fourfold to $1,194.
By contrast, out-of-pocket outlays on hospitals (one of the two major Medicare benefits) went down in inflation-adjusted dollars, from $228 to $90, and on physician costs (the other major Medicare benefit), they rose only from $316 to $408.
Pollack said it is clear that the elderly are getting more care today than in 1961, and that accounts for part of the constant-dollar increase per household in out-of-pocket medical costs. But he said well over half the increase is from prices "which have increased well beyond the general level of inflation."
"The two most important changes that need to occur include serious systemwide cost containment and protection against the bankrupting costs of long-term care," Pollack said.
"Growing old and growing sick should not mean growing poor, but increasingly it does."

by Bhavesh Jinadra by CNB