Key Facts About Health Care Affordability for People With Medicare
Health care costs and affordability recently topped the public’s list of economic anxieties in the U.S., according to KFF polling. Even people with insurance say they struggle to afford health care costs, including people with Medicare. While Medicare provides health insurance coverage to 70 million people age 65 or older and younger adults with long-term disabilities, having Medicare coverage does not insulate beneficiaries from health-related affordability challenges, such as not getting needed medical care due to costs or incurring medical debt. In a 2026 KFF Health Tracking Poll, half (49%) of all Medicare beneficiaries ages 65 and older say they expect their health care costs to become less affordable in the next year.
This brief presents key facts and analysis about affordability of health care costs among people with Medicare, including younger adults with long-term disabilities, drawing on data from various sources.
One in four Medicare beneficiaries (16.5 million people) had income below $24,600 per person in 2024, or about 160% of the federal poverty level that year. These estimates take into account income from Social Security, pensions, retirement account (IRA) withdrawals, and other sources. At the upper end of the income spectrum, the top 5% of Medicare beneficiaries (3.3 million people) had incomes above $169,700 per person. Many beneficiaries also have relatively low levels of savings, with one in four Medicare beneficiaries having savings below $18,950 per person in 2024. Financial resources are even lower among some subgroups of beneficiaries, including Black and Hispanic beneficiaries. For example, one in four Black beneficiaries had income below $20,150 per person in 2024, while one in four Hispanic beneficiaries had income below $14,150 per person.
About 6 million people ages 65 and older (10%) were living in poverty in 2024 under the official poverty measure, meaning they had income of $15,050 or less that year (if single), while 17.3 million (28%) had incomes below 200% of poverty. Poverty rates among older adults are higher under an alternative measure (the supplemental poverty measure, or SPM) that accounts for certain expenses that are higher among older people, including out-of-pocket medical expenses, with 15% of older adults living in poverty in 2024 under the SPM.
In 2025, nearly a quarter (23%) of all Medicare beneficiaries who received Social Security benefits relied on Social Security income for 90% or more of their total per capita income, while about one-third (32%) relied on Social Security for at least 75% of their income. In 2025, the average per capita Social Security income was $20,168 among those who depended on Social Security for at least 90% of their income and $20,670 among those who depended on Social Security for at least 75% of their income.
Out-of-pocket health care spending for Medicare premiums and out-of-pocket costs for health care services accounted for 36% of Medicare beneficiaries’ average Social Security income per person in 2023. In 2023, Medicare beneficiaries spent an average of $6,459 out of pocket on health care costs and had average Social Security income of $17,718 (though most older adults have other sources of income beyond Social Security that can be used to pay their out-of-pocket health care costs). Out-of-pocket spending includes premiums for Medicare supplemental coverage (Medigap) for those who enroll in traditional Medicare and buy private supplemental insurance.
Health care spending accounted for 14% of Medicare beneficiaries’ total household spending in 2024. Medicare households spent a larger share of their total household spending on health care than non-Medicare households in 2024 (6%).
More than 7 million Medicare beneficiaries enrolled in Medicare Part B in 2024 spent more than 10% of their annual per capita income on Part B premiums alone. The standard Part B premium is paid by beneficiaries in both traditional Medicare and Medicare Advantage and has roughly doubled in the last decade, from an annual amount of $1,259 in 2015 to $2,435 in 2026.