Rockville, Md. In 1998, Medicare costs totaled $217 billion, or 12 percent of the federal budget. With the population getting proportionally older, these costs will undoubtedly continue to increase, experts say. In light of these statistics, a recent report titled Out-of-Pocket Health Care Costs Among Older Americans and published in the Journal of Gerontology: Social Sciences, analyzes the out-of-pocket payments that certain Medicare subgroups have had to pay to cover health costs.

Based on data from the 1995 Medicare current beneficiary survey, the study concludes that older people who have higher incomes and are in good health might not have much difficulty paying for rising out-of-pocket costs, but that such increased costs would significantly burden beneficiaries with chronic health conditions and without employer-subsidized supplemental coverage or Medicaid.

Supported in part by the Agency for Healthcare Research and Quality, the report reveals that Medicare beneficiaries spent an average of 19 percent of their incomes in out-of-pocket expenditures. Such expenditures, however, for those beneficiaries in poor health were 28.5 percent of income; for those more than 85 years old, 22.4 percent; and for those in the lowest income group, 31.5 percent, despite Medicaid coverage.

Other results from the study show that older people who relied only on fee-for-service Medicare paid 23 percent of their incomes, a greater burden than those who had employer-sponsored coverage (16.1 percent) and those enrolled in Medicare health maintenance organizations (14.8 percent). In addition, because of the high cost of Medigap premiums, beneficiaries who had Medicare supplemental coverage on an individual basis experienced the highest mean burden by paying 25.5 percent of income.

The report also warns that the impact of proposed Medicare changes geared toward cost containment, such as shifting from a "defined benefit" to a "premium support" model, should be carefully considered.

In another study, Dimensions of Consumer-Assessed Quality of Medicare Managed Care Health Plans, published in Medical Care, Harvard University researchers analyzed data taken from a survey of 89,419 Medicare beneficiaries enrolled in 212 managed care plans. The Health Care Financing Administration initially conducted this survey to determine how beneficiaries assessed their health plans. The researchers, who were also supported in part by AHRQ, concluded that the survey distinguished several factors of quality of care that patients relate to individual plans or their network of providers.

Among the 85 survey items, some were geared specifically toward Medicare managed care and asked about various issues, including ease of obtaining medical equipment and home health services. The report identifies four factors that beneficiaries use to assess their health plans: delivery of care in the doctor's office, customer service, access to medical services, such as specialist care or equipment, and advice on healthpromoting activities, such as diet and smoking cessation.