Medicare Home Health Beneficiaries Already Have Significant "Skin In The Game" By Maintaining Housing, Associated Costs Of Living

New analysis quantifies beneficiaries' existing cost burden and finds that that imposing a copayment could lead to greater expense for Medicare and taxpayers

WASHINGTON, Nov. 15, 2012 /PRNewswire-USNewswire/ -- A new analysis conducted by the Partnership for Quality Home Healthcare with Avalere Health finds that Medicare home health beneficiaries already bear significant out-of-pocket expenditures by staying in their own homes.  The study also finds that Medicare home health beneficiaries enable Medicare to avoid considerable costs that would otherwise be borne by the program and taxpayers if beneficiaries were instead served in institutional settings.

"For years, we've heard the argument that seniors need to put 'skin in the game'," said Chairman Billy Tauzin, senior counsel to the Partnership for Quality Home Healthcare. "I would argue, and this study confirms, that by paying for their own housing and associated costs of living, Medicare home health beneficiaries are contributing considerable 'skin in the game' and saving Medicare precious dollars."

According to Avalere Health's data analysis, the average annual cost of basic living expenses for low-income beneficiaries in the community is $15,648, which represents a beneficiary contribution that helps reduce Medicare spending.  The analysis further indicates that low-income seniors' annual living costs exceed 50 percent of their annual income.  By absorbing these costs and remaining in their homes, beneficiaries enable Medicare to deliver services in the least costly setting – patients' own homes.

A troubling result of home healthcare copayments could be an increase in the number of patients who forego routine care and end up with more serious and costly health issues as a result.  A study in the New England Journal of Medicine revealed that while copayments succeeded in reducing the number of outpatient visits, costly hospital admissions actually increased under such a scenario. The researchers concluded that the cost of the additional hospitalizations exceeded the savings from the decrease in outpatient visits.

"We know, unequivocally, that seniors prefer to age in place and that today's skilled home healthcare services succeed in keeping many Americans healthy and out of costlier settings," added Tauzin. "Copayments for home healthcare act as a disincentive for this least costly alternative and thus are bad for Medicare, bad for seniors, and bad for our efforts to keep more Americans healthy at home.  Congress learned this lesson once before, repealing this bad idea in 1977.  It's a lesson we should not have to learn again."

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