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Similar but Not the Same: How Medicare Per Capita Spending Compares for Younger and Older Beneficiaries

Issue Brief
  1. This provision was included in the Social Security Amendments of 1972, with Medicare coverage effective July 1, 1973.

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  2. Centers for Medicare & Medicaid Services (CMS), 2013 Medicare & Medicaid Statistical Supplement, Table 2.1 Medicare Enrollment: Hospital Insurance and/or Supplementary Medical Insurance Programs for Total, Fee-for-Service and Managed Care Enrollees as of July 1, 2012: Selected Calendar Years 1966-2012.

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  3. CMS/Office of Enterprise Data and Analysis/Office of the Actuary, CMS Fact Facts, available at https://www.cms.gov/fastfacts/

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  4. Except as noted, estimates in this paragraph are for 2012 and based on Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2012 Cost and Use file.

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  5. Gretchen Jacobson, Christina Swoope, Tricia Neuman, and Karen Smith, Income and Assets of Medicare Beneficiaries, 2014-2030, Kaiser Family Foundation, September 2015, available at http://kff.org/medicare/issue-brief/income-and-assets-of-medicare-beneficiaries-2014-2030/.

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  6. Kaiser Family Foundation analysis of a five percent sample of Medicare claims from the CMS Chronic Conditions Data Warehouse, 2014. Total spending for traditional Medicare in 2014 was $390 billion.

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  7. The analysis excludes beneficiaries who are age 65 because some of these beneficiaries are enrolled for less than a full year; therefore, a full year of Medicare spending data is not available for all people at this year of age.

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  8. Medicare spending for Medicare Advantage enrollees takes the form of monthly capitation payments which are not based on actual service utilization.

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  9. As of 2013, the share of beneficiaries enrolled in Medicare Advantage was lower among beneficiaries under age 65 than among older beneficiaries (22% versus 29%); Medicare Payment Advisory Commission, A Data Book: Health Care Spending and the Medicare Program, June 2015, Chart 9-11, available at http://www.medpac.gov/documents/data-book/june-2015-databook-health-care-spending-and-the-medicare-program.pdf.

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  10. Total Part D spending includes payments by Part D plans for covered drugs and Low-Income Subsidy (LIS) payments for cost-sharing subsidies for eligible Part D enrollees. A disproportionate share of LIS subsidy recipients are beneficiaries under age 65. In 2014, three quarters of Medicare beneficiaries under age 65 and enrolled in Part D received LIS (76%), three times the share of those over age 65 and enrolled in Part D receiving LIS (23%) (based on Kaiser Family Foundation analysis of CCW data).

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  11. See Medicare Payment Advisory Commission, A Data Book: Health Care Spending and the Medicare Program, Section 10: Prescription Drugs, Chart 10-2, June 2015; Steven Sheingold, et al., “Medicare Part B Drugs: Pricing and Incentives,” ASPE Issue Brief, Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, March 2016.

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  12. In 2014, 9% of traditional Medicare beneficiaries over age 65 had a diagnosis of breast, colorectal, endometrial, lung, or prostate cancer, compared to 2% of beneficiaries under age 65 (based on Kaiser Family Foundation analysis of CCW data).

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  13. In 2014, 17% of all traditional Medicare beneficiaries under age 65 used inpatient services, 2% used skilled nursing facility services, and 6% used home health services. This compares to 16%, 5%, and 10% (for each type of service, respectively) of beneficiaries over age 65 (based on Kaiser Family Foundation analysis of CCW data).

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  14. In 2014, 2% of all traditional Medicare beneficiaries under age 65 died, compared to 5% of beneficiaries over age 65 (based on Kaiser Family Foundation analysis of CCW data).

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  15. In 2014, 26% of all traditional Medicare beneficiaries under age 65 who died used hospice services, compared to 49% of beneficiaries over age 65 who died that year (based on Kaiser Family Foundation analysis of CCW data).

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  16. Beneficiaries with ALS are included in this group but not separately identifiable.

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.