OK, you knew that already. But what are the implications for access to care?
t probably won’t come as a surprise to you that traditional Medicare (TM) pays lower health care prices than commercial market insurers. We’ve known this for quite some time. A significant issue, however, is whether lower TM rates lead (or could lead) to reduced access to care for Medicare beneficiaries.
Jacob Wallace and Zirui Song took up the issue in a Health Affairs paper published last year. They examined health care price and utilization of outpatient imaging and outpatient surgical procedures across the 65-year divide — when most people become eligible for Medicare. Their data included just over 200,000 individuals captured in Truven Health Analytics’ 2007–2013 Medicare and Commercial Claims and Encounters database with broad-network, commercial market insurance before age 65 and TM from age 65 onward.
As shown in the chart just below, unadjusted, per beneficiary, quarterly spending trends for outpatient imaging and procedures are about the same before and after Medicare eligibility, but there is a large discontinuity when Medicare eligibility begins. In the last quarter before age 65, spending for a privately insured patient is about $119. At age 65, on Medicare, that drops 25% to about $89. After adjusting for age, quarter, year, and individual fixed effects, the relative change upon Medicare eligibility is even larger: 32%.