Medicare hike hits hard for some seniors
By Beverly Creamer
Advertiser Staff Writer
The impact of next year's 13.5 percent increase in Medicare premiums paid by the elderly — an additional $7.90 a month — may be minimal for some, but will be felt deeply by others.
For Kahalu'u's Candice Muneoka, who has been caring for her elderly parents, Ed and Maria Souza, every dollar counts, and a new increase to $66.60 per month may mean trimming back on little treats like a movie or dinner out, or again postponing plans to make small fixes to the house.
"My mother's in daycare with Alzheimer's and my father is in a wheelchair," said Muneoka, whose husband, Jimmy, helps with their care. "If this goes up, it means we'll have to sacrifice in other areas. One option is asking other family members to chip in. We've never had to do that."
The Muneokas' situation makes it clear how even a small dollar increase in Medicare premiums can have far-reaching impacts, even affecting the already strained state budget.
The state shares half the cost of Medicare with the federal government, and the latest increase could add up to an additional $150,000 a month.
With healthcare costs on a continual rise, the annual increases are necessary to satisfy a congressional mandate that Medicare participants' premiums cover a fourth of the overall cost of the health-care program.
Hardest hit by the coming increase may be those who were self-employed, have no pension and now live on small Social Security incomes. They number an estimated 72,000, according to Greg Marchildon, state director of AARP.
"Most folks on Medicare are probably low- and middle-income people who are living on fixed incomes, just above the threshold for Medicaid assistance," Marchildon said. "Many of these people worked much of their careers without benefits of plans like a 401 (k), so Social Security became the foundation of their retirement."
These retirees often ran their own small businesses or worked in low-paying service industry jobs that didn't come with strong retirement plans, said Marchildon.
Muneoka's parents are perfect examples. Both in their 80s, the Souzas have no pensions and their only income is the Social Security checks that together add up to $1,200 a month — just $60 more than their basic monthly expenses.
Out of that $1,200 comes $750 for the daycare program, $166 for medical insurance through the Kaiser Senior plan, and $225 for prescription drugs. Muneoka and other family members pay for the elderly couple's food and clothing, and for extras such as the new dentures Ed Souza needed recently.
"There are always unexpected things," said Muneoka, who is also struggling to give her youngest son the best opportunities she can. "If they get sick, it's covered. But if there's a costly medication they come home with, that's another matter. We have to cover that. It's just us."
The Medicare increases are a concern even to those who are trying to prepare for the day when elderly parents will need additional care.
Lana Kalahiki of Waimanalo is one of those worried about whether she'll be able to afford increased costs of care for her 84-year-old mother. "Because she's on a fixed income around $1,600 monthly, it will have some effect," Kalahiki said. "It's overwhelming."
According to the 2000 Census, there are 160,600 people aged 65 and older living in Hawai'i, and that number is steadily rising. National studies show Hawai'i has one of the fastest-growing populations of elderly people in the United States.
In total, 180,447 people in the state are enrolled in Medicare, which also provides health coverage for the disabled, regardless of age. About 179,000 people in Hawai'i participate in the Medicaid program for low-income residents, including 18,800 over age 65 who are living below the poverty level, according to the state Department of Human Services.
Some senior citizens are hoping the modest 2 percent cost-of-living adjustment in Social Security payments will offset the rise in Medicare premiums. But a two-prong plan in Congress to provide a Medicare prescription drug benefit and to make higher-income participants pay more of their Medicare expenses may have a greater impact on a wider number of elderly.
The state pays Medicare premiums as well as deductibles and co-payments for the majority of Medicaid recipients who are on Medicare. This means that the increase in Medicare premiums will have no impact on Medicare patients who are also on Medicaid.
There seems to be general agreement in Congress that wealthier older Americans should pay more for doctor visits and other outpatient care. While that may seem fair, it could also have dire consequences for folks like retired state employees Carolyn Choy, 90, of Honolulu, and her husband, who may be better off than many seniors but are by no means rich.
Right now, benefits provided under their state retirement plan pick up their monthly Medicare premiums and pay for eye care and dental care. They also paid for several costly surgeries Choy needed in the past few years.
"Right now we haven't been asked to pay for any of these expensive operations," she said. "But if we couldn't afford it, it would be terrible."
The Medicare prescription drug bill would be of sweeping benefit to all seniors, no matter what their financial status.
"The cost of prescription drugs is going up about 18 percent a year," said the AARP's Marchildon. "It's having an enormous impact. ... It's the drugs that people need the most and take the most, the maintenance drugs like those for high cholesterol, high blood pressure, diabetes, ulcers, asthma, mental illness, that can be hundreds of dollars a month.
"We're seeing people having to make choices like paying rent or paying for their prescription drugs."
Reach Beverly Creamer at bcreamer@honoluluadvertiser.com or 525-8013.
Correction: The state pays Medicare premiums as well as deductibles and co-payments for the majority of Medicaid recipients who are on Medicare. This means that the increase in Medicare premiums will have no impact on Medicare patients who are also on Medicaid. Hawai'i has about 179,000 recipients in its Medicaid programs for low-income residents. A previous version of this story contained other information.
