Despite Medicare’s significant successes, the program’s out-of-pocket costs are burdensome for many and medical debt is far too common.
Medicare’s benefit design and lack of financial protections expose beneficiaries to frequent and high costs. Enrollees financially contribute to their coverage through payroll taxes, premiums, deductibles, and other cost-sharing amounts. Many also pay for prescription drug coverage, supplemental insurance, and services that Medicare does not cover, such as comprehensive dental, vision, and hearing care. Although Medicare Advantage (MA) caps enrollee out-of-pocket costs, that ceiling, nearly $9,000 in 2024, is one 95% of beneficiaries are not expected to meet. Research and our own experience indicate cost challenges persist program-wide, often with harmful results. For example, a recent survey from The Commonwealth Fund revealed similar shares of people with Original Medicare (OM) and MA skipped care because they could not afford it, and that while many beneficiaries accrue medical debt, some MA enrollees were more likely than people with OM to do so.
A recent KFF data note examines the issue of medical debt in greater detail, unpacking the findings from a 2022 KFF Health Care Debt Survey on its prevalence and consequences among Medicare beneficiaries aged 65 and older.
More than one in five adults aged 65 and older (22%) reported having debt due to their own or someone else’s medical or dental expenses. The bills that caused their debt were often for routine services, such as lab fees and diagnostic tests (49%), dental care (48%), visits to the doctor (41%), and prescription drugs (24%).
These findings underscore the importance of comprehensive coverage for all enrollees. Medicare’s lack of comprehensive dental coverage is a clear driver of beneficiary debt. Although some MA plans offer oral health benefits, “the scope of coverage varies widely, and enrollees may still incur substantial out-of-pocket costs for these services.” Establishing a robust oral health benefit under Medicare Part B would best promote access to affordable dental care for both OM and MA enrollees. Similarly, program-wide beneficiary protections, such as a meaningful out-of-pocket cap and greater financial assistance, as well as program integrity reforms, like reducing overpayments to hospital outpatient departments and MA plans, are needed to lower costs for Medicare, beneficiaries, and taxpayers.
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