Medicare Statistics

Key insights:

• As of March 2024, 66.4 million people, or 19.6% of the U.S. population, are covered by Medicare. Of those, 34.2 million are enrolled in Original Medicare.
• Nearly half (47.59%) of eligible Medicare beneficiaries are enrolled in Medicare Advantage as of March 2024.
• Medicare households spend nearly twice as much on health-related expenses, on average, than non-Medicare households (13.6% of total household spending compared to 6.5%, respectively).
• Medicare spending grew 5.9% to $944.3 billion in 2022 (the most recent data available), or 21% of the total national health expenditure.
• An aging U.S. population, rising enrollment and higher costs per person have contributed to the growth in total Medicare spending.
• The percentage of those aged 65 and older and, thus, eligible for Medicare, increased by nearly 39% (15.52 million people) between 2010 and 2020.

Medicare Enrollment Numbers

As of March 2024, 66.4 million people, or 19.8% of the U.S. population, are covered by Medicare. Of those, 34.2 million are enrolled in Original Medicare. This is up from 18.7% of the population in 2022.

Generally speaking, Medicare enrollment numbers are increasing in correlation with the aging population.

• According to the latest Census data, nearly 17% of the U.S. population (55.7 million people), were 65 and older in 2020, and thus eligible for Medicare.
• The percentage of those aged 65 and older has increased by 38% (15.2 million people) since 2010 The under-65 population has grown only 2% over the same time period.

Medicare Enrollment Numbers by Plan Type (2023)

How many Medicare enrollees are under age 65?

• 11% of Medicare enrollees are under age 65.
• 59.5 million Medicare beneficiaries are enrolled due to age (65 and older).
• 11% of Medicare enrollees are age 85+ (as of 2021).

How many Medicare enrolled are disabled?

• 7.4 million Medicare beneficiaries are enrolled due to disability.

What are the most common health conditions of Medicare members?

• Mental health conditions: 25%
• Functional impairment: 28%
• Five or more chronic conditions: 17%

Medicare Industry Trends

Medicare spending accounted for 13% of the U.S. federal budget in 2023, up from 12% in 2020.

• Between 2000 and 2022, Medicare spending increased from just under $200 billion to $744 billion. Outlays are projected to reach nearly $1.7 trillion by 2033. Following this trend, the share of federal spending on Medicare could rise to one-fifth of the total budget by 2051. 
• In 2021, Medicare spending comprised 13% of the federal budget and 21% of national health care spending.
• Since 2000, Medicare spending (Medicare benefits payments) has seen an average annual growth rate of 6.3%.

Medicare costs are forecasted to continue increasing over time as the population continues to age.

• As certain diseases of old age, like Alzheimer’s disease, become increasingly prevalent, healthcare costs for seniors will rise. In 2021, Alzheimer's disease cost Medicare and Medicaid an estimated $239 billion in care costs. By 2050, this number is projected to reach $798 billion.

The Inflation Reduction Act may help lower out-of-pocket spending for prescription drugs for 2024 and beyond.

• Starting in 2025, federal legislation will activate a $2,000 annual out-of-pocket spending cap for prescription drugs. This may incentivize manufacturers to negotiate lower healthcare costs overall to compete in the market.

The Future of Medicare

The 2023 report of Medicare’s trustees finds that the Hospital Insurance Trust Fund will be able to pay 100% of the hospital insurance costs that Medicare provides through 2031.

• Beyond that, incoming payroll taxes and other revenue will still be sufficient to pay 89% of Medicare hospital insurance costs.
• The share of costs covered by dedicated revenues will decline slowly to 81% in 2047 and then rise gradually to 96% by 2097.

Medicare Costs

Medicare households spent an average of $7,000 (13.6% of total household spending) on health care in 2022, while non-Medicare households spent $4,900 (6.5% of total household spending). The health care burden is twice as large among Medicare households than non-Medicare households. On average, Medicare households have lower total household spending and higher medical costs. Twenty-nine percent of Medicare households spent 20% or more of their total household spending on health-related expenses, compared to just 7% of non-Medicare households.

However, non-Medicare households spend more in total than Medicare households, including $5,800 more per year on housing, $4,200 more on food and $6,100 more on transportation.

As of 2023, Medicare Part B premiums account for about 9.2% of the average Social Security benefit, up from 3.25% in 2002.

After adding in the cost of Part A and Part B deductibles, these combined costs can account for between 17.3% and 39.5% of the average Social Security benefit. 

Medicare spending on Part B benefits increased between 2012 and 2022, and Part B spending is expected to grow to over half of total Medicare spending by 2031. Meanwhile, spending under Part A is projected to decrease.

Medicare Fraud

The Social Security Administration estimates that Medicare fraud costs Americans about $60 billion per year.

The National Health Care Anti-Fraud Association (NHCAA) estimates that the financial losses due to healthcare fraud top tens of billions of dollars each year. Experts estimate fraud losses account for 3% to 10% of total U.S. healthcare expenses.

The most common examples of Medicare fraud are:

• Billing for services that were never rendered or for more expensive services/procedures never provided (upcoding)
• Performing medically unnecessary services 
• Presenting non-covered treatments as medically necessary covered treatments
• Falsifying a patient’s diagnosis and medical record to justify tests, surgeries or other procedures that aren’t medically necessary
• Billing for each step of a procedure as if they are separate procedures (unbundling)
• Billing a patient more than the required co-pay amount for services already covered by the plan

Medicare Enrollment by State

Sources:

The Retirement Living editorial team primarily relies on government data, original research from other reputable publications, and industry experts to inform their writing. Specific sources for this article include:

1. “Fast Facts March 2024 Version.” Centers for Medicare & Medicaid Services. Evaluated April 4, 2024
2. “FAQs on Health Spending, the Federal Budget, and Budget Enforcement Tools.” KFF.org. Evaluated April 4, 2024.
3. “Exploring Age Groups in the 2020 Census.” U.S. Census Bureau. Evaluated April 4, 2024.
4. “Saving money with the prescription drug law.” Medicare.gov. Evaluated April 4, 2024.
5. “2022 Report.” The Boards Of Trustees, Federal Hospital Insurance And Federal Supplementary Medical Insurance Trust Funds. Evaluated April 4, 2024.
6. “The Facts About Medicare Spending.” KFF.org. Evaluated April 4, 2024.
7. Ochieng, N., Cubanski, J., & Damico, A. “Medicare Households Spend More on Health Care Than Other Households.” KFF.org. Evaluated April 4, 2024.
8. “Monthly Enrollment by State 2024 02.” Centers for Medicare & Medicaid Services. Evaluated April 4, 2024.
9. 10. “Medicare Fraud Prevention Week.” Social Security Administration. Evaluated April 1, 2024.
10. 11. “The Challenge of Health Care Fraud.” National Health Care Anti-Fraud Association. Evaluated April 1, 2024.
11. 12.”2024 Medicare Parts A & B Premiums and Deductibles.” Centers for Medicare & Medicaid Services. Evaluated March 25, 2024.
12. 13. Ochieng, N., Clerveau, G., Cubanski, J., & Neuman, T. “A Snapshot of Sources of Coverage Among Medicare Beneficiaries.” KFF.org. Evaluated March 25, 2024.
13. 14. “Medicare Monthly Enrollment.” Centers for Medicare & Medicaid Services. Evaluated March 25, 2024.
14. 15. “Medicare Beneficiaries by Type of Entitlement.” KFF.org. Evaluated March 25, 2024.
15. 16. “Innovation in Behavioral Health (IBH) Model.” Centers for Medicare & Medicaid Services. Evaluated March 25, 2024.
16. 17. Freed, M., Damico, A., Fuglesten Biniek, J., & Neuman, T. “Medicare Advantage 2024 Spotlight: First Look.” KFF.org. Evaluated March 25, 2024.
17. 18. “Yearly deductible for drug plans.” Medicare.gov. Evaluated March 25, 2024.
18. 19. Cubanski, J., & Neuman, T. “Changes to Medicare Part D in 2024 and 2025 Under the Inflation Reduction Act and How Enrollees Will Benefit.” KFF.org. Evaluated March 25, 2024.
19. 20. “Monthly premiums for drug plans.” Medicare.gov. Evaluated March 25, 2024.
20. 21. “Monthly Enrollment by State 2024 02.” Centers for Medicare & Medicaid Services. Evaluated March 25, 2024.22.“2023 Report.” The Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. Evaluated April 4, 2024.