Older adults are indeed more likely to face medical debt despite having Medicare coverage. While Medicare provides a foundational level of health insurance for people aged 65 and older, it does not cover all medical expenses, leaving many seniors responsible for significant out-of-pocket costs that can accumulate into debt.
Medicare, primarily through Part A (hospital insurance) and Part B (medical insurance), covers many essential healthcare services, but there are notable gaps. These gaps include copayments, deductibles, coinsurance, and services not covered by Original Medicare, such as long-term care, dental, vision, hearing, and many prescription drugs. Because of these gaps, seniors often face hundreds or thousands of dollars in annual out-of-pocket expenses. For example, surgeries, extended treatments, and prescription medications can become very costly, especially amid rising inflation and the general cost-of-living increases that disproportionately affect older adults on fixed incomes.
Many seniors try to bridge these gaps by purchasing supplemental insurance plans known as Medigap policies, which help cover some of the costs that Medicare does not. However, not all seniors can easily switch or obtain these supplemental plans due to underwriting restrictions, especially if they have pre-existing conditions. Some states have “birthday rules” that allow limited opportunities to change Medigap plans without medical underwriting, but these are not universal and can be confusing to navigate.
Additionally, some older adults rely on employer-based retiree insurance or continue working to maintain job-based insurance that coordinates with Medicare. These secondary coverages can help offset costs but often do not cover everything, and not all seniors have access to such benefits.
Financially, the burden is significant. Many Medicare beneficiaries have limited income and assets, with median incomes declining as age increases. A substantial portion of seniors report delaying or foregoing necessary medical care, including doctor visits, vision, hearing, dental care, or prescription drugs, due to cost concerns. This avoidance can lead to worsening health and potentially higher costs down the line.
Moreover, Medicare Part B premiums are rising and projected to nearly double over the next decade, increasing the financial strain on seniors. While there are Medicare Savings Programs designed to assist low-income beneficiaries with premiums and cost-sharing, many seniors with modest incomes do not qualify or are unaware of these programs, and recent policy changes may reduce access to such assistance.
Recent legislative changes have introduced some improvements, such as a $2,000 out-of-pocket maximum under Medicare Part D for prescription drugs starting in 2025, which wil
