Out-of-pocket health expenditures by older adults in relation to age, race, and insurance

Out-of-pocket health expenditures by older Americans are examined in relation to age, race, and type of insurance coverage supplemental to Medicare. Expenditures for eight different health goods and services are examined, as well as total out-of-pocket costs excluding and including insurance premiums. Data are from two large national survey samples of older adults: the 1990 Elderly Health Supplement to the Panel Study of Income Dynamics (N = 1031 age 66 and older), and the 1995–96 wave of the AHEAD survey (N = 6237 age 72 and older).; Out-of-pocket costs did not increase with age for most services, and most of the positive age effects that were significant were explained by health. The exception was for long-term care services, for which use increased dramatically in the oldest age groups even when health was controlled.; Blacks and Hispanics had lower mean out-of-pocket costs than Whites, however race effects either attenuated or became non-significant in hierarchical analyses. Greater eligibility for Medicaid accounted for some race effects, and others were explained by education and economic status. Race remained significant as a predictor of lower costs in some cases, which may reflect race differences in access, cultural dispositions, and the intensity of treatment among users.; Those with supplemental insurance had the highest out-of-pocket costs for several services. There was evidence of moral hazard but not adverse selection among those with insurance. Those enrolled in Medicare HMOs had lower overall out-of-pocket costs than those with supplemental insurance, and this was not explained by favorable selection or decreased access to services. Those dually-eligible for Medicaid had significantly lower out-of-pocket costs than those with supplemental insurance, overall and for the majority of services.; The burden of total out-of-pocket costs (excluding insurance premiums) as a portion of income increased with age, was lower for minority elders, and was highest for those with only fee-for-service Medicare. Patterns of discretionary and non-discretionary service use suggest barriers in access to appropriate care among the oldest-old, racial minorities, those with only fee-for-service Medicare, and those dually eligible for Medicaid.