Out-of-Pocket Spending for Medicare Beneficiaries to Soar by 2030

Medicare Expenses

As if it wasn’t expensive enough to get sick in the U.S., a recent study found that a large number of Medicare beneficiaries will continue to be financially burdened from healthcare expenses.

Keep in mind that Medicare helps pay for the healthcare needs of 59 million Americans, or roughly 20% of the population, including a large number of adults over the age of 65 and younger adults with permanent disabilities. Many of these individuals are burdened with relatively high out-of-pocket expenses for their healthcare, including deductibles, premiums, and cost sharing for Medicare-covered services. They also need to pay for services not covered by Medicare, including long-term services and support and dental care.

The financial stress to cover healthcare costs is already high but it’s going to get a lot worse. Researchers at the Kaiser Family Foundation looked at out-of-pocket spending expenses for Medicare beneficiaries for 2013 and expected projections for 2030, in constant 2016 dollars.

Some key findings:


  • Out-of-pocket expenses for all Medicare beneficiaries’ spending, as a share of average per capita Social Security income, was 41% in 2013. It is expected to hit 50% by 2030.
  • In 2013, 36% of traditional Medicare beneficiaries (excluding Medicare Advantage) and half of those with incomes below $20,000 spent at least 20% of their per capita total income on healthcare expenses. By 2030, 42% of traditional Medicare beneficiaries will spend at minimum of 20% of their total income on medical expenses.
  • For beneficiaries age 85 and over, the median spending burden is expected to rise from 22% to 26%. This means that half of traditional Medicare beneficiaries age 85 and over will spend more than 25% of their income on healthcare costs in 2030.
  • In 2030, half of traditional Medicare beneficiaries with annual per capita total income of $10,000 or less are projected to spend at least 34% of their total income on out-of-pocket healthcare costs, up from 25% in 2013. By comparison, for beneficiaries with incomes greater than $50,000, the spending burden is projected to rise by just one percent between 2013 and 2030 (from seven percent to eight percent).

Reducing Medicare and Medicaid spending and Social Security benefits will more than likely hurt older Americans living on tight budgets. Rising healthcare costs will also hurt those who get most of their income from Social Security. Out-of-pocket expenses will also have a disproportionate impact on those with the lowest amount of disposable income.



Medicare Beneficiaries’ Out-of-Pocket Health Care Spending as a Share of Income Now and Projections for the Future,” The Henry J. Kaiser Family Foundation, January 26, 2018.


Categories: Inequality, News