Report Shows People With Medicare Feeling Pinch of Rising Health Care Costs

As affordability concerns remain top of mind for many Americans, a timely KFF report examines Medicare beneficiary finances and health care costs, lending context to these anxieties.

Recent KFF polling found that as health care costs continue to grow and cost-of-living increases stress household budgets, paying for care and coverage tops the list of consumer financial concerns. In total, 64% of households said they were “very” or “somewhat” worried about affording health care. This is a higher rate than those concerned about meeting other basic needs, like monthly utilities (57%), food and groceries (57%), rent or mortgage (52%), and gasoline or other transportation costs (52%).

People With Medicare Affected by Rising Costs

Medicare coverage does not insulate enrollees from health care cost concerns. While beneficiary satisfaction with Medicare is high, challenges paying for it persist. Medicare enrollees make significant, often burdensome, contributions—including paying payroll taxes, premiums, cost sharing, and filling coverage gaps.

Many assume paying for care will only get harder.

And many assume paying for care will only get harder. In a 2026 KFF Health Tracking Poll, half (49%) of all Medicare beneficiaries 65 and older said they expect their health care costs to become less affordable in the next year.

Many Medicare Enrollees Have Limited Resources

In 2024, one in four Medicare beneficiaries (16.5 million people) had income below $24,600 and less than $18,950 in savings. Financial resources are even lower among some subgroups. Among Black and Hispanic enrollees, 25% lived on less than $20,150 and $14,150, respectively.

Many people with Medicare rely heavily on Social Security to stay afloat. For 23% of Medicare enrollees receiving Social Security in 2025, those benefits (about $20,000) represented 90% of their income. Another 32% relied on Social Security for at least 75% of their income.

Medicare Households Spend Heavily on Health Care

Health care costs comprise a large and disproportionate share of Medicare beneficiaries’ limited budgets. In 2023, Medicare premiums and out-of-pocket costs ($6,459) accounted for 36% of the average Social Security benefit ($17,718).

Previous KFF research found nearly 30% of Medicare households spent 20% or more of their income on health care, compared to only 7% of non-Medicare households. In 2024, 14% of total Medicare beneficiary spending was on health care, while non-Medicare households spent 6%.

More than 7 million Medicare beneficiaries spent more than 10% of their income on Part B premiums.

More than 7 million Medicare beneficiaries spent more than 10% of their income on Part B premiums alone. KFF notes “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.”

Anxiety About Drug Costs Still High

Drug costs also remain a concern for many with Medicare, partly due to utilization and health status. Over two-thirds of Medicare beneficiaries have multiple chronic conditions and Part D enrollees take four to five prescriptions per month, on average. While the Inflation Reduction Act made significant improvements to prescription drug affordability—including capping covered insulin at $35 a month, expanding access to the full Part D Low-Income Subsidy program (also known as Extra Help), establishing the Medicare Drug Price Negotiation Program, and capping out-of-pocket drug spending at $2,100 in 2026—KFF March polling found that 50% of Medicare beneficiaries age 65 and older remain worried about prescription drug affordability.

Medicare Coverage Gaps Worsen Affordability

Many beneficiaries face additional costs due to gaps in Medicare coverage. For example, Original Medicare (OM) does not include critical comprehensive dental, vision, and hearing care. While most Medicare Advantage (MA) plans include some coverage of these services, it is often limited. In 2023, OM enrollees spent an average of $1,107 on dental services and $564 on hearing services, while people with MA spent roughly $571 and $212, respectively.

Long-term services and supports, which are generally not covered by either OM or MA, are widely unaffordable.

Long-term services and supports (LTSS), which are generally not covered by either OM or MA, are widely unaffordable. In 2025, the median costs for LTSS—$80,080 for caregiver services, $129,575 for a private room in a nursing home, and $306,760 for 24/7 home health aide services—eclipsed the median income ($43,200) and savings ($110,100) among people with Medicare.

Affordability Challenges Have Serious Consequences

Intense financial pressures create impossible choices. Beneficiaries who cannot afford care may be forced to go without it. About one in five (22%) Medicare-age adults reported having some type of medical debt; 40% cut back on other household spending and used up all or most of their savings as a result.

Overall, more than one-third (36%) of beneficiaries report delaying or skipping care due to affordability concerns in 2023. In addition to leading to worse outcomes and lower well-being, the cost to Medicare is also extreme. Beneficiaries who forgo treatment and experience declining health as a result may require more expensive interventions later.

Beneficiaries who forgo treatment may require more expensive interventions later.

Looking Ahead

Without reforms, these challenges are likely to get worse. Medicare spending is expected to grow due to rising prices, greater utilization, and higher MA payments. Since premiums and deductibles are tied to Medicare spending, this means beneficiary costs will also increase. Between 2026 and 2034 alone, the Medicare Part B premium and deductible are projected to swell by roughly 70%, while the Part A deductible is projected to grow by about 30%.

These costs will also consume an even larger portion of beneficiary resources over time. In 2025, premiums and cost sharing for Medicare Part B and Part D accounted for 25% of the average Social Security benefit. By 2040, this share is projected to reach 33%.

The Medicare Rights Center urges policymakers to pursue comprehensive strategies to improve access to affordable health care and prescription drug coverage and strengthen financial security for current and future beneficiaries alike.