Medicare Beneficiaries With Near Low Income Face Highest Health Care Affordability Challenges

Despite moderate out-of-pocket spending, Medicare beneficiaries with near low income face the highest rates of health care affordability problems, according to a study published today in JAMA Network Open, highlighting gaps in current financial assistance programs and the need for targeted policy interventions.¹

Standard Medicare benefits involve substantial cost sharing, which may lead to high out-of-pocket expenses for beneficiaries. Financial assistance programs help mitigate these costs by covering Medicare Parts A and B premiums and cost sharing for beneficiaries with limited assets and incomes below 100% of the federal poverty level (FPL), as well as premiums for those with incomes between 100% and 150% of the FPL.

The researchers noted the importance of understanding how health care affordability varies across income levels and the availability of public assistance, as this knowledge can inform policies aimed at improving care access for Medicare beneficiaries.

Prior studies have shown that qualified Medicare beneficiary subsidies reduce out-of-pocket costs and increase health care use for low-income beneficiaries. However, beneficiaries with incomes between 100% and 150% of the FPL, who often face similar social challenges, are typically ineligible for these subsidies and report worse medication adherence, higher financial stress, and lower use of high-value care.

These findings raise concerns about care affordability and whether current financial assistance programs adequately protect beneficiaries with near low income from financial hardship. To address these gaps, the researchers conducted a cross-sectional study examining health care affordability problems among Medicare beneficiaries across income levels corresponding to subsidy eligibility.

The study focused on financial burden (spending >20% of annual postsubsistence income on out-of-pocket costs), financial barriers to care (delaying or foregoing care due to cost), and medical debt. Using data from the Medical Expenditure Panel Survey, a nationally representative survey of the US noninstitutionalized population spanning 2018 to 2022, the researchers categorized eligible individuals into 4 household income groups: low income (<100% of FPL), near low income (100%-150% of FPL), middle income (150%-400% of FPL), and high income (>400% of FPL).²

The sample consisted of 24,398 Medicare beneficiaries with a mean (SD) age of 71.6 (9.3) years.¹ Of these, 3811 had low income, 2894 had near low income, 9115 had middle income, and 8578 had high income. Compared with those with middle or high income, beneficiaries with low or near low income reported worse health and lower employment rates. They were also more likely to belong to racial and ethnic minority groups and have Medicaid coverage.

Out-of-pocket spending rose with increasing income, beginning at $1363 (95% CI, $1301-$1425) for those with near low income, followed by $1765 (95% CI, $1571-$1958) for those with low income, $2611 (95% CI, $2512-$2710) for those with middle income, and $3964 (95% CI, $3875-$4054) for those with high income.

Despite this gradient, beneficiaries with near low income faced the highest levels of health care affordability challenges. After adjusting for age, sex, and health status, 54.0% (95% CI, 52.7%-55.3%) reported experiencing at least 1 affordability problem, compared with 43.0% (95% CI, 40.5%-45.5%) in the low-income group, 45.2% (95% CI, 44.1%-46.4%) in the middle-income group, and 25.5% (95% CI, 24.7%-26.4%) in the high-income group.

These patterns were consistent across all affordability measures. Although few beneficiaries experienced all 3 types of affordability problems, large proportions reported financial burden alone, financial barriers to care alone, or both without medical debt.

Lastly, they acknowledged their limitations, including that the sample was limited to the noninstitutionalized US population, excluding those in nursing homes and residential treatment facilities. Additionally, although the researchers used validated measures to assess health care affordability problems, these relied on self-reported data, which may be subject to reporting error. Still, they expressed confidence in the validity of their findings.

“These findings underscore the need for targeted policy interventions to address economic challenges among beneficiaries with near low income,” the authors concluded.

References

1. Park S, Fung V. Health care affordability problems by income level and subsidy eligibility in Medicare. JAMA Netw Open. 2025;8(9):e2532862. doi:10.1001/jamanetworkopen.2025.32862
2. Medical Expenditure Panel Survey: data overview. Agency for Healthcare Research and Quality. Updated April 22, 2019. Accessed September 22, 2025. https://www.meps.ahrq.gov/mepsweb/data_stats/data_overview.jsp