While Medicare provides health insurance coverage for those over 65 years of age, many still are underinsured, experiencing substantial out-of-pocket costs for covered and non-covered services as a proportion of their income. Using the Health and Retirement Study (HRS), this study found that being underinsured is a significant predictor of entering into Medicaid coverage over a 16-year period. The rate of entering Medicaid was almost twice as high for those who were underinsured and with physical and/or cognitive impairment than those who were not, while supplemental health insurance reduced the rate of entering Medicaid by 30 %. Providing more comprehensive coverage through the traditional Medicare program, including a ceiling on out-of-pocket expenditures or targeted support for those with physical or cognitive impairment, could postpone becoming covered by Medicaid and yield savings in Medicaid.
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Willink, A., Davis, K., Schoen, C. et al. Physical and/or Cognitive Impairment, Out-of-Pocket Spending, and Medicaid Entry among Older Adults. J Urban Health 93, 840–850 (2016). https://doi.org/10.1007/s11524-016-0078-1