Near Low–Income Medicare Beneficiaries Face More Affordability Problems Than Other Income Groups

Medicare beneficiaries with near low-income experience the most affordability problems when compared with those in low-, middle-, and high-income brackets, reported a new study in JAMA Network Open.¹

Despite Medicare’s extensive coverage for essential health care services, these benefits include substantial cost-sharing, which can lead to high out-of-pocket (OOP) costs. Beneficiaries with an income at or below 100% of the federal poverty line (FPL) qualify for Medicaid assistance with Medicare Parts A and B premiums through the Qualified Medicare Beneficiary program in addition to the Medicare Savings program and the Part D low-income subsidy (LIS) program—income-based subsidies that help mitigate cost-sharing and high OOP costs. Beneficiaries with income between 100% and 150% of the FPL are also eligible for assistance with Part B through the specified low-income Medicare beneficiary, qualified individuals program, and the full or partial Part D LIS program, however, they must have both Parts A and B to qualify.

Those with incomes just above the threshold for the Part D LIS program reported lower adherence to medication and increased financial stress specifically due to drug cost when compared to other income groups, even those whose incomes were below the FPL.¹

“To inform effective policies that improve access to care for Medicare beneficiaries, it is essential to understand how health care affordability varies across income levels as well as the availability of public assistance,” the study authors wrote.

The average monthly income to qualify for any of these subsidies is between $1325 and $1781, with resource limits that exceed $9000.² Yet, in 2022 Medicare households spent an average of $7000 on health care, amounting to nearly 20% of beneficiaries' total income—whose incomes were below 150% of the FPL. ¹

The cross-sectional study used data from the 2018–2022 Medical Expenditure Panel Survey, resulting in a population size of 24,398 Medicare beneficiaries with complete information. Health care spending, use, and affordability were measured in the analysis. Household income was measured as a percentage and categorized into 4 groups: low (<100% of FPL), near low income (100%-150% of FPL), middle income (150%-400% of FPL), and high income (>400% of FPL).

Health Care Spending by Income Group

The mean age of the study population was 71.6 years. Of them, 54.95% were women and 45.1% were men; 18.1% were Hispanic, 5.8% were non-Hispanic Asian, 12.2% were non-Hispanic Black, 60.0% were non-Hispanic White, and 3.6% were of another race and ethnicity. Regarding income, 3811 beneficiaries were low income, 2894 were near low income, 9115 were middle income, and 8578 were high income.

Overall, low income and near low-income beneficiaries reported worse health when compared to other income levels. They were also more likely to belong to a minority racial or ethnic group, report having Medicaid coverage, have lower employment rates, and less likely to report having private insurance coverage. The differences between the low-income and near low-income beneficiaries did not vary drastically regarding health factors. When measuring for the prevalence of 3 to 5 chronic conditions, it was 17.7% vs 17.1%, respectively, but decreased for middle income and high income (13.1% and 9.9%, respectively). Self-reported health also increased with income level, with 62.8% of beneficiaries with low-income reporting excellent, very good, or good physical health when compared with beneficiaries with near-low, middle, and high income (67.3%, 77.8%, and 87.6%, respectively).

Comparatively, health care spending also increased by income group, even after adjusting for demographic and health care factors, “suggesting that beneficiaries with lower income had lower health care spending conditional on clinical need.”

Total health care spending was $11,890 (95% CI, $11,479-$12,302) for beneficiaries with low-income, $12,831 (95% CI, $12,419-$13,243) for beneficiaries with near low income, $13,369 (95% CI, $13,006-$13,732) for beneficiaries with middle income, and $15,015 (95% CI, $14,442-$15,588) for beneficiaries with high income.

Health Care Affordability by Income Group

Beneficiaries with near low income reported the highest levels of health care affordability for financial burden, access to care, and medical debt. More than half (54.0%) of near low-income beneficiaries reported at least 1 health care affordability problem when compared with beneficiaries with low, middle, and high incomes (43.0%, 45.2%, and 25.5%, respectively). Furthermore, beneficiaries with near low income also reported more financial burdens and barriers and reported medical debt when compared with beneficiaries of the other income groups.

While only a small portion of each income group experienced all three affordability issues, there were more beneficiaries with near low income that experienced all three when compared to the other income groups.

“OOP health care expenses account for a disproportionately larger share of household income for beneficiaries with near low-income compared with beneficiaries with low income. This financial burden is likely associated with the limited financial support available for individuals with near low-income,” the study authors explained. “Although beneficiaries with low-income may receive more comprehensive financial protections through Medicaid and other assistance programs, individuals with near low-income often fall into a critical coverage gap—earning too much to qualify for full assistance but still struggling to afford necessary care.”

This study has several limitations. The sample excluded institutionalized populations, and findings relied on self-reported data that may be prone to error. Additionally, the analysis did not account for all confounders, assets in subsidy eligibility, inconsistencies in units of analysis, or geographic variation in health care costs and access.

“Despite having a similar health status as beneficiaries with low income, beneficiaries with near low income faced a critical coverage gap, lacking adequate financial protections while struggling to afford necessary care,” the study authors concluded. “These findings underscore the need for targeted policy interventions to address economic challenges among beneficiaries with near low-income.”

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. Medicare Savings Programs. Medicare. Accessed September 23, 2025. https://www.medicare.gov/basics/costs/help/medicare-savings-programs