* projected costs assume an annual 5.1% inflation rate
DESCRIPTION
Figure 1. Average Out-of-Pocket Health Care Spending, for All Medicare Beneficiaries Age 65 and Up. * Projected costs assume an annual 5.1% inflation rate. Figure 2. Average Annual Supplemental Medigap Plan F Premium for Medicare Beneficiaries Age 65 and Up. - PowerPoint PPT PresentationTRANSCRIPT
Figure 1. Average Out-of-Pocket Health Care Spending, for All Medicare Beneficiaries Age 65 and Up
$3,455
$5,144
$8,459
$0
$2,000
$4,000
$6,000
$8,000
$10,000
2003 2011* 2021*
* Projected costs assume an annual 5.1% inflation rate.
Figure 2. Average Annual Supplemental Medigap Plan F Premium for Medicare Beneficiaries Age 65 and Up
$1,728
$2,329
$3,830
$0
$1,000
$2,000
$3,000
$4,000
$5,000
2003 2011* 2021*
* Projected costs assume an annual 5.1% inflation rate.
Figure 3. Medicare Beneficiaries Without Supplemental Coverage, 2002
12%13%
17%
12%
6%
0%
5%
10%
15%
20%
Percentage by annual household income
Allbeneficiaries
<$10,000 $10,001–$20,000
$20,001–$40,000
>$40,000
Figure 4a. Average Out-of-Pocket Health Care Spendingin 2003, for Poor and Middle-Income Individuals
$2,995$3,360 $3,475
$3,785
$0
$1,000
$2,000
$3,000
$4,000
$5,000
<135% 135%–199% 200%–399% >400%
Percent of Federal Poverty Level
Figure 4b. Average Out-of-Pocket Health CareSpending as a Percentage of Income in 2003,
for Poor and Middle-Income Individuals
33%28%
21%
12%
0%
10%
20%
30%
40%
50%
<135% 135%–199% 200%–399% >400%
Percent of Federal Poverty Level
Figure 5. How Projected Account Holdings at Age 65Vary for Poor- and Middle-Income Individuals
$0
$10,000
$20,000
$30,000
$40,000
<100% 100%–149%
150%–199%
200%–299%
>300%
15 years, 0.5% of income 15 years, 1.0% of income
Percent of Federal Poverty Level
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
<100% of poverty* 100-149% of poverty**
5 yr .5% unsubsidized 5 yr .5% w/ low income subsidy
15 yr .5% unsubsidized 15 yr .5% w/ low income subsidy
5 yr 1% unsubsidized 5 yr 1% w/ low income subsidy
15 yr 1% unsubsidized 15 yr 1% w/ low income subsidy
Figure 6. Pretax Account ContributionsWith and Without Low-Income Subsidy
Accumulated under 5- and 15-year investment scenarios
* 50% annual subsidization level
** 25% annual subsidization level.
Figure 7. Prefunded Account Holdings vs.Annual Medical Costs in 2021, by Income Level
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
<100% ofpoverty
100-149% ofpoverty
150-199% ofpoverty
200-299% ofpoverty
>300% ofpoverty
Medigap Plan F average annual premiumAverage annual out-of-pocket health care spending15 yr savings at 0.5% income & low income subsidy15 yr savings at 1% income & low income subsidy
Figure 8. Account Holdings vs. Costs: The Difference Between Accounts Opened at Age 50 and at Age 60
$0
$2,000
$4,000
$6,000
$8,000
$10,000
Opened at age 60 (2011 projection) Opened at age 50 (2021pProjection)
Account Holdings
Medigap Plan F average annual premiumAverage annual out-of-pocket health care spending, 175% of poverty
For individuals with incomes between 150% and 199% of FPL and at 1 percent investment level
Figure 9a. Participation in IRA or 401(k)-Type Plans,by Income Quintile
23.2%
36.2%
48.2%59.1%
73.5%
0%
20%
40%
60%
80%
100%
Firstquintile
Secondquintile
Thirdquintile
Fourthquintile
Fifthquintile
Percentage of individuals ages 55 to 64 in 2004
Source: Survey of Income and Program Participation Study (2004, Wave 1).
Figure 9b. Participation in IRA or 401(k)-Type PlansRelative to Poverty Level
23%29% 31%
55%
0%
20%
40%
60%
80%
100%
<100% 100%–199% 200%–299% >300%
Percentage of individuals ages 55 to 69 in 2000
Source: Health and Retirement Study, 2000.
Percent of Federal Poverty Level
Figure 10a. Average Retirement Account Holdingsfor Individuals Ages 55 to 69, by Income Quintile, 2004
0%
20%
40%
60%
80%
100%
All incomelevels
Firstquintile
Secondquintile
Thirdquintile
Fourthquintile
Fifthquintile
Source: Survey of Income and Program Participation Study (2004, Wave 1).
Percentage of individuals with no holdings
Figure 10b. Estimated Average Retirement Account Holdingsfor Individuals Ages 55 to 69, by Income Quintile
$42,500
$10,000$25,700
$44,200
$74,800
$152,200
$0
$50,000
$100,000
$150,000
$200,000
All incomelevels
Firstquintile
Secondquintile
Thirdquintile
Fourthquintile
Fifthquintile
Source: Authors’ tabulation based on the Survey of Income and Program Participation Study (2004, Wave 1), the 2000 Health and Retirement Study, and Johnson, Burman, Kobes (2004).
Figure A-1. Projected Holdings at Age 65by Percentage of FPL and Under Alternative Assumptions
$0
$10,000
$20,000
$30,000
$40,000
<100 FPL 100-149 FPL 150-199 FPL 200-299 FPL 300+ FPL
Figure B-1. Subsidized* Account Holdingsand Average Annual Costs for Individuals
Under 100% of Federal Poverty Level
$6,152
$3,830
$1,610
$3,220
$0
$2,000
$4,000
$6,000
$8,000
$10,000
Avg. annualout-of pockethealth care
Avg. annualMedigap Plan F
premium
15-yearinvestment,
0.5% of income
15-yearinvestment,
1.0% of income
Accumulated pretax contribution at 0.5% or 1.0% of income
* Subsidized annually at the 50% level.
Figure B-2. Subsidized* Account Holdingsand Average Annual Costs for Individuals
at 100%–149% of Federal Poverty Level
$7,232
$3,830$3,100
$6,200
$0
$2,000
$4,000
$6,000
$8,000
$10,000
Avg. annualout-of pockethealth care
Avg. annualMedigap Plan F
premium
15-yearinvestment,
0.5% of income
15-yearinvestment,
1.0% of income
Accumulated pretax contribution at 0.5% or 1.0% of income
* Subsidized annually at the 25% level.
Figure B-3. Unsubsidized Account Holdingsand Average Annual Costs for Individuals
at 150%–199% of Federal Poverty Level
7,232
3,830 3,893
7,787
$0
$2,000
$4,000
$6,000
$8,000
$10,000
Avg. annualout-of pockethealth care
Avg. annualMedigap Plan F
premium
15-yearinvestment,
0.5% of income
15-yearinvestment,
1.0% of income
Accumulated pretax contribution at 0.5% or 1.0% of income
Figure B-4. Unsubsidized Account Holdingsand Average Annual Costs for Individuals
at 200%–300% of Federal Poverty Level
$9,022
$3,830
$5,834
$11,668
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Avg. annualout-of-pockethealth care
Avg. annualMedigap Plan F
premium
15-yearinvestment,
0.5% of income
15-yearinvestment,
1.0% of income
Accumulated pretax contribution at 0.5% or 1.0% of income
Figure B-5. Unsubsidized Account Holdingsand Average Annual Costs for Individuals
Above 300% of Federal Poverty Level
$9,022
$3,830
$16,382
$32,764
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Avg. annualout-of-pockethealth care
Avg. annualMedigap Plan F
premium
15-yearinvestment,
0.5% of income
15-yearinvestment,
1.0% of income
Accumulated pretax contribution at 0.5% or 1.0% of income