Medicare Statistics

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How to Cite RetirementLiving.com’s Article

APA:Hamer, L. (2023, October 11). Medicare Statistics. RetirementLiving.com. Accessed February 18, 2025, from https://www.retirementliving.com/best-medicare-supplement-plans-companies/medicare-statistics
Chicago:Hamer, Lauren. “Medicare Statistics.” RetirementLiving.com. Last updated December 18, 2024. https://www.retirementliving.com/best-medicare-supplement-plans-companies/medicare-statistics.
MLA:Hamer, Lauren. “Medicare Statistics.” RetirementLiving.com, October 11 2023, https://www.retirementliving.com/best-medicare-supplement-plans-companies/medicare-statistics.

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Millions of Americans rely on Medicare to cover their healthcare costs. Out of these, older adults aged 65+ are enrolled in Medicare Advantage and Original Medicare plans. 

Rising enrollment and higher per-person expenses drove Medicare spending to $944.3 billion in 2022, consuming a large share of the national health budget.

Reports show households with Medicare beneficiaries spend a higher portion of their income on healthcare compared to non-Medicare households. Here are important statistics to know more about Medicare. 

Medicare Statistics

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

Medicare Enrollment Data by Plan Type (2023)

How many Medicare enrollees are under age 65?

  • 11% of Medicare enrollees are under age 65.
  • The number of Medicare beneficiaries enrolled due to age (65 and older) is 59.5 million.
  • 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.
  • 3 million disabled beneficiaries are aged under 65.

What are the most common health conditions of Medicare members?

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

Medicare Coverage Breakdown

The Medicare program has three main plan enrollment options: Original Medicare (Parts A and B), Medicare Advantage (Part C), and Prescription Drug Coverage (Part D).

1.  Original Medicare (Part A and Part B):

  • Part A covers hospital services (inpatient care, skilled nursing, hospice).
  • Part B covers outpatient services (doctor visits, preventive care, medical supplies).
  • Beneficiaries can see any doctor who accepts Medicare, but they often need stand-alone prescription drug plans (Part D) for their medication coverage 
  • Around 52.2 million older adults were enrolled in Medicare Part A, while 48.2 million beneficiaries aged 65 and over were enrolled in Part B, based on the 2019 Medicare data.

2. Medicare Advantage (Part C):

  • Offered by private health insurance companies approved by Medicare.
  • Combines Part A, Part B, and usually Part D (prescription drugs) into one plan.
  • Often includes extra benefits like dental, vision, and hearing.
  • Requires using a network of doctors and may involve copays, deductibles, or referrals for specialists.
  • As of 2024, nearly 54% of eligible Medicare beneficiaries are enrolled in Medicare Advantage plans.

3. Prescription Drug Coverage (Part D)

  • Beneficiaries of Part A and B can see any doctor who accepts Medicare, but they often need stand-alone prescription drug plans (Part D) for their medication coverage 

Advantage Vs. Original Medicare

  • 89% of seniors aged 65 and older have some type of additional coverage for Traditional Medicare, leaving only 11% without any supplemental plans in 2022. 
  • The majority of beneficiaries aged 65 and older are covered by Traditional Medicare (89%) or Medicare Advantage (87%).
  • Medigap is predominantly used by older beneficiaries, with 98% being aged 65 and older.
  • Employer-sponsored insurance programs also primarily cover those 65 and older (96%).
  • Medicaid is more commonly used by beneficiaries under 65.

Additional Coverage + Traditional Medicare Among Older Adults Beneficiaries 

Medicare for Nursing Home Coverage

Most enrolled seniors rely on Medicare to cover costs for nursing home facilities. According to the Centers for Medicare & Medicaid Services (CMS) program, more than one-fifth of Medicare fee-for-service hospitalizations are now discharged to nursing homes for post-acute care.

  • Around 13% of nursing home residents depend on Medicare to cover skilled nursing facility care.
  • The CMS program reports that 1.2 million residents live in certified nursing facilities across the United States.
  • The number of certified nursing facilities decreased by 4%, from 15,648 facilities in July 2015 to 15,003 facilities in July 2023.

Medicare Coverage for Special Conditions

Medicare program covers various kinds of special health conditions for its beneficiaries, some of them include:

  • End-Stage Renal Disease (ESRD)
  • Chronic Diseases, like diabetes, heart disease, and cancer
  • Long-Term Care
  • Prescription Drug Coverage for Chronic Illnesses

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 the Medicare program 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 healthcare 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.

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

The Future of Medicare

The 2023 Medicare trustees report indicates that the Hospital Insurance Trust Fund can fully cover hospital health insurance costs through 2031.

  • Beyond that, payroll taxes and other revenue will cover about 89% of Medicare hospital insurance costs.
  • The portion of costs covered by dedicated revenues will drop to 81% by 2047, then gradually increase to 96% by 2097.

While these projections highlight long-term sustainability, immediate challenges are arising with Medicare Advantage (MA) plans:

  • The 2024 open enrollment period brought uncertainty for 34 million seniors enrolled in MA plans, as insurers scaled back benefits and dropped health plans due to profitability concerns.
  • 1.8 million people could lose their MA plans in the coming year as insurers withdraw from less profitable markets.
  • Drug deductibles for about two-thirds of MA members are set to increase by 167% next year.

Given these shifts, seniors may want to consider enrolling in Traditional Medicare with supplemental Medigap coverage to ensure stable access to healthcare.

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 healthcare burden is higher for Medicare households compared to non-Medicare households. The Medicare population spends a larger portion of their income on medical expenses, even though their overall household spending on other needs, like housing and transportation, is lower.

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 2024, the Medicare Part B premium is $174.70 per month, but it will increase to $185.00 in 2025. The Part B annual deductible has also risen to $240 for 2024, and it will further increase to $257 in 2025. 
  • Medicare Part B premiums account for about 9.2% of the average Social Security benefit in 2023, compared to 3.25% in 2002. Including Part A and Part B deductibles, these costs can take up between 17.3% and 39.5% of the average Social Security benefit. 
  • Medicare spending on Part B has grown over the past decade and is predicted to make up more than half of total Medicare spending by 2031 while spending on Part A is expected to decrease.
  • Starting in 2025, a cap of $2,000 per year will be introduced for out-of-pocket prescription drug costs under Part D. Beneficiaries will also have the option to pay this amount in monthly installments.

Coverage Adjustment for High-Income Beneficiaries

Since 2007, Medicare Part B premiums have been adjusted based on income for around 8% of beneficiaries. In 2025, high-income individuals will see increased premiums depending on their income levels.

For example, individuals with incomes over $106,000 (or joint filers over $212,000) will pay increased premiums, starting from $259 per month and scaling up based on higher income brackets.

For more details, visit the CMS fact sheet

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) predicts that healthcare fraud costs billions of dollars every year. Experts estimate fraud losses account for 3% to 10% of total U.S. healthcare expenses.

The most common examples of Medicare fraud are:

  • Charging for services that were not performed or billing for more expensive procedures that were never provided (known as upcoding).
  • Conducting unnecessary medical procedures solely to produce insurance payments.
  • Misrepresenting non-covered treatments as medically necessary services
  • Altering a patient's diagnosis or medical records to justify unnecessary tests, surgeries, or procedures.
  • Charging separately for each step of a treatment or medical procedure.
  • Overcharging beyond the required co-pay for services already covered under the plan.

Medicare Enrollment by State

  • California has the highest population enrolled in Medicare, amounting to 6.7M individuals, with 3.38M enrolled in the Medicare Advantage plan. 
  • Alaska has the lowest Medicare enrollment due to its smaller population and the absence of MA plans in the state.

Bottom Line

Medicare remains essential for millions, covering 66.4 million people as of the latest data. However, rising costs are a concern. In 2025, Part B premiums will increase to $185 with a deductible of $257.

Medicare Advantage plans are expected to face changes, leaving some seniors with reduced coverage options. The 2024 open enrollment period brought uncertainty for 34 million seniors, as insurers continue to scale back benefits and exit unprofitable markets, potentially affecting 1.8 million enrollees. 

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