There is a lot of talk about "underinsurance," to the point that the U.S. Senate HELP Committee held a hearing on it a couple of weeks ago.

Underinsurance is usually defined as a family spending more that 10% of its income on health care in a given year.

 Now the Kaiser Family Foundation has released a couple of reports showing that the much-vaunted Medicare program is the greatest source of underinsurance. Perhaps the Senate should address its own responsibilities before telling the rest of us what to do.

The KFF researchers, Juliette Cubanski, Anthony Damico, and Tricia Newman, found in “Health Care on a Budget,” that despite Medicare’s massive unfunded liabilities, the average household on Medicare still spends 14.1% of its income on health care. This contrasts sharply with the 4.3% spent by non-Medicare households. Of this amount, 62.9% goes to premiums for Part B, Part D, and Medigap, 18.1% goes to prescription drugs, 15.3% to medical services, and 3.8% to medical supplies.

I was puzzled about how long term care expenses were treated in this analysis, so I asked the authors.  Tricia Neuman directed me to another study by the same authors, “Revisiting Skin in the Game.” She said the first study included only the “non-institutionalized population,” so it would include what people pay for LTC premiums but not for stays in a nursing home. The second study includes that population and also provides trends since 1997.

This second study is even more alarming, showing that the median OOP spending for Medicare beneficiaries has grown from 11.9% of income in 1997 to 16.1% in 2005. This is in spite of the advent of Medicare Part D. It breaks out the population in facilities and finds that almost all of their income is spent on health care. The median income of this population is $11,000 and the median OOP spending is $9,776.