Additionally, the analysis underestimates the health care spending burden for households that incur long-term care facility costs because the Consumer Expenditure Survey does not include people who reside in facilities. Health spending data for 2021 for both Medicare and non-Medicare households might be lower than what would otherwise have been expected absent the COVID-19 pandemic, since utilization and spending fell sharply in 2020 due to the pandemic and continued at lower-than-expected levels in 2021. The health care spending burden was twice as large for Medicare households than for non-Medicare households in 2021, measured by average health care spending as a share of total household spending, and one in three Medicare households spend at least 20% of their household budgets on health care. Three out of four Medicare households (75%) spent 10% percent or more of their total household spending on health, compared to one out of four non-Medicare households (26%) (Figure 3). One in 3 Medicare households spent 20% or more of their total household spending on health-related expenses in 2021, compared to 1 in 14 non-Medicare householdsĬonsistent with the higher health care spending burden among Medicare households compared to non-Medicare households, one in three (32%) Medicare households spent 20% or more of their total household spending on health-related expenses compared to one in 14 (7%) non-Medicare households. Average spending on other expenses (e.g., education, clothing) comprised a smaller share of Medicare households’ total spending (21%) than non-Medicare households’ total spending (28%). Transportation accounted for a smaller share of Medicare households’ total spending (13%) compared to non-Medicare household spending (17%), but both Medicare and non-Medicare households spent similar shares on food (15% for both). The larger burden of health care spending among Medicare households than non-Medicare households is a function of both lower average total household spending for Medicare households than non-Medicare households and higher health care use, which results in higher health care spending by Medicare households.Īcross all spending categories, housing accounted for the largest share of total household spending for both Medicare and non-Medicare households, with the share larger for Medicare households (37%) than non-Medicare households (33%). Health care expenses include health insurance premiums, medical services (e.g., hospital and physician services), prescription drugs, and medical supplies (e.g., crutches, eyeglasses, hearing aids). Medicare households spent an average of $6,557 on health care, accounting for 15% of their total household spending ($44,686), while non-Medicare households spent $4,598 on their health care, accounting for 7% of their total household spending ($67,769) (Figure 1). Medicare households spent more on health care than non-Medicare households, both as an annual dollar amount and as a share of total household spending. (See Methods for details on the analysis.) The health care spending burden was twice as large among Medicare households than non-Medicare households in 2021 Average health-related expenses accounted for 15% of Medicare households’ total spending compared to 7% for non-Medicare households. In this analysis, we assess the financial burden of health care spending among households where all members are covered by Medicare (referred to as Medicare households) compared to households where no members are covered by Medicare (referred to as non-Medicare households), based on data from the 2021 Consumer Expenditure Survey. Further, there is no limit on out-of-pocket spending for beneficiaries in traditional Medicare, and beneficiaries often incur out-of-pocket costs for services not covered under traditional Medicare, such as dental, hearing, and vision services. Additionally, people on Medicare may face additional premiums for Medicare Part D prescription drug coverage, Medicare Advantage coverage, and supplemental insurance. Medicare beneficiaries contribute to the cost of their health care coverage through monthly premium payments, deductibles, and other cost-sharing requirements. While the vast majority (91%) of Medicare beneficiaries give their Medicare coverage an overall positive rating, health care cost-related problems are not uncommon. Sixty-five million adults are covered by Medicare, including 57 million adults ages 65 and older and nearly 8 million adults under age 65 with disabilities.
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