Health Issues

Current trends in healthcare usage and expenditure indicate that health service spending has surpassed pre-pandemic levels, with costs escalating at a pace quicker than in recent years. Nevertheless, the use of healthcare services varies significantly by setting and market. For instance, certain indicators of hospital utilization are still below pre-pandemic figures, potentially signaling a shift towards outpatient care.

This collection of charts explores the latest trends in healthcare utilization and expenditure using multiple data sources. By the first quarter of 2024, the annual increase in health services spending has outstripped levels seen prior to the pandemic.

The complete chart collection and additional information on health costs can be accessed at the Peterson-KFF Health System Tracker, a comprehensive online resource focused on evaluating and monitoring the efficacy of the U.S. health system.

Written by KFF’s Tricia Neuman, Juliette Cubanski, and Larry Levitt, this article in Health Affairs Forefront explores the implications of the inaugural Medicare drug price negotiations, detailing the savings they will provide for both the government and Medicare recipients. Additionally, the piece considers how candidates’ perspectives on this topic may influence the upcoming elections and the future of drug price negotiations by the government.

In 2022, out of the 167 million individuals with employer-sponsored insurance, 3.4 million utilized at least one of the top 10 drugs designated for Medicare price negotiations, as reported by a new KFF analysis. Medicare anticipates releasing the negotiated drug prices, which are set to take effect in 2026, no later than September 1, 2024.

The most frequently prescribed drug for those with employer-sponsored health insurance was Jardiance, a medication used for managing diabetes and heart failure, with over 911,000 enrollees using it.

Looking ahead, the Medicare program will negotiate prices for additional medications, potentially affecting millions more individuals with employer coverage. Currently, the impact of reduced drug prices in Medicare on private insurance plans is not direct, and the indirect effects remain uncertain. Some experts contend that lower negotiated prices in Medicare could lead to increased prices in private insurance, whereas others argue that these Medicare prices may establish a benchmark, facilitating savings.

The complete analysis and further information regarding health costs can be found on the Peterson-KFF Health System Tracker, a dedicated online resource for monitoring and evaluating the U.S. health system’s performance.

In 2022, out of the 167 million individuals with employer-sponsored insurance, 3.4 million utilized at least one of the first 10 medications earmarked for Medicare price negotiations, according to a recent analysis. The drug most commonly used by those with employer-sponsored health insurance was Jardiance, which is prescribed for diabetes and heart failure, with over 911,000 enrollees using it.

This analysis leverages the Merative MarketScan 2022 commercial claims data to estimate the number of enrollees in the employer-sponsored insurance sector who use one or more of the ten drugs chosen for Medicare Part D price negotiations.

The complete analysis and additional information regarding health costs can be found on the Peterson-KFF Health System Tracker, a comprehensive online resource aimed at monitoring and evaluating the performance of the U.S. healthcare system.

According to a recent KFF analysis of preliminary rate filings, ACA Marketplace insurers are suggesting a median premium hike of 7% for 2025. This is quite similar to the 6% increase that was proposed for 2024. The proposed rate adjustments from insurers, which predominantly range from 2% to 10%, are subject to change during the review phase.

While the majority of Marketplace participants benefit from subsidies and are unlikely to bear these increased costs directly, rising premiums typically lead to augmented federal expenditures on subsidies. Additionally, the reasons put forth by insurers for these premium adjustments provide insights into the broader factors influencing health spending.

KFF’s analysis of publicly available documents reveals that insurers attribute the escalation in premiums for 2025 to rising healthcare costs, specifically for hospital services, alongside an uptick in the utilization of weight loss and other specialty medications.

This year, the surge in costs that insurers encounter for medical services appears to have a more significant impact on premiums than the increase in care usage. Insurers highlight that workforce shortages and the consolidation of hospital markets, which exert upward pressure on healthcare costs and prices, are contributing to the rise in health insurance premiums for 2025.

Simultaneously, the escalating demand for GLP-1 medications like Ozempic and Wegovy, which are prescribed for diabetes and obesity, is driving up spending on prescription drugs.

The complete analysis and additional information regarding health costs can be accessed at the Peterson-KFF Health System Tracker, an online platform committed to tracking and evaluating the performance of the U.S. healthcare system.

This revised report on insurers’ initial rate filings indicates that ACA Marketplace insurers are proposing a median premium hike of 7% for 2025, which is comparable to the 6% increase filed for 2024. Insurers attribute the premium surge for 2025 primarily to escalating healthcare costs — especially in hospital care — along with a rise in the use of weight loss and other specialized medications, as highlighted by KFF’s review of publicly available documents.

The proposed rate adjustments by insurers, most of which range from 2% to 10%, may be subject to changes during the evaluation process. While the vast majority of Marketplace participants are subsidized and are not anticipated to bear these added expenses, increases in premiums typically lead to higher federal expenditures on subsidies.

This analysis is accessible on the Peterson-KFF Health System Tracker, a resource dedicated to monitoring and evaluating the performance of the U.S. healthcare system.

A newly updated issue brief examines the factors influencing health expenditures in the U.S. and highlights key distinctions between the U.S. and other affluent, large nations. The study reveals that individuals in the U.S. spent an additional $5,683 per person on healthcare compared to their counterparts in similarly sized and wealthier countries. Nearly 80% of this spending disparity can be attributed to costs associated with inpatient and outpatient care. Additionally, many retail prescription medications are priced higher in the U.S. In 2021, the U.S. allocated $1,635 per capita on prescription drugs, including over-the-counter medications, while comparable countries averaged $944.

The full analysis is accessible through the Peterson-KFF Health System Tracker, a comprehensive online resource aimed at monitoring and evaluating the U.S. health system’s performance.

In the United States, health care debt has become a widespread concern, catching the attention of lawmakers and emerging as a possible campaign topic. A 2022 KFF survey revealed that 2 out of 5 US adults (41%) across all age groups reported incurring some form of debt due to medical or dental expenses for themselves or others. Almost 75% of adults express concern over managing unexpected medical bills or healthcare costs, which is higher than those worried about other household expenses. The Medicare program provides health insurance to 66 million individuals, primarily older adults aged 65 and above, assisting with medical care costs for eligible individuals. However, many older adults still face health care cost issues, resulting in significant debt exposure with potentially serious and lasting repercussions for both health and finances.

Medicare covers a broad spectrum of health care services, including hospital stays, doctor visits, prescription medications, and post-acute care. However, beneficiaries typically face out-of-pocket expenses for premiums, deductibles, cost-sharing for Medicare-covered services, and expenses for non-covered services such as dental, vision, and hearing care and long-term services and supports. Households with Medicare beneficiaries generally spend more on health care compared to other households and allocate a higher percentage of their budgets to medical expenses. This is especially challenging for the millions of Medicare beneficiaries who have limited income and savings to cover unexpected health-related expenses. Additionally, older adults are more prone to cognitive impairments like Alzheimer’s Disease, which have been linked to declines in credit scores and financial instability years before diagnosis.

This data note explores findings from the KFF Health Care Debt Survey to evaluate the prevalence, sources, and repercussions of health care debt among adults aged 65 and older.

Key Takeaways

• In 2022, over one in five US adults aged 65 and above (22%) reported some form of debt due to medical or dental expenses, a figure that is half of what was reported among adults aged 50-64 (44%).
• Among Medicare-age adults facing health care debt, significant portions stated that some of the bills leading to their debt stemmed from routine health care services, including lab fees and diagnostic tests (49%), dental services (48%), and doctor visits (41%).
• Nearly 30% of Medicare-age adults with health care debt (29%) reported that their household had been contacted by a collection agency over medical or dental invoices in the last five years, while one-quarter (23%) noted that health care debt adversely impacted their credit score.
• Sixty-two percent of Medicare-age adults with health care debt indicated that they, or someone in their household, delayed, skipped, or sought alternatives to necessary health care or prescription medications due to costs in the past year.

In 2022, 22% of US adults aged 65 and older reported incurring health care debt due to medical or dental bills (Figure 1). This percentage is about half of that seen in adults aged 50 to 64 (44%), who have yet to qualify for Medicare based on age. The lower incidence of health care debt among older adults is likely attributed, in part, to nearly universal Medicare coverage for individuals aged 65 and over. Additionally, most Medicare beneficiaries possess some form of coverage that mitigates their cost-sharing exposure, like Medicare Advantage or supplemental coverage such as Medicaid, retiree health benefits, or Medigap.

The prevalence of health care debt among those aged 65 and older surpasses what has been reported elsewhere, primarily due to variances in the definitions and methodologies used to assess health care debt. Surveys have frequently concentrated on unpaid medical bills or those sent to collections, potentially overlooking individuals who finance their health care expenses through credit card debt, loans, or borrowing from family and friends. Therefore, the KFF Health Care Debt Survey offers a comprehensive perspective on health care debt, considering various types of debt incurred due to medical or dental expenses, as well as debts related to someone else’s care, such as that of a child, spouse, or parent.

Numerous older adults are managing their health care bills via credit card debt or other borrowing methods (Figure 2). Approximately 10% of Medicare-age adults report having medical or dental expenses they are paying down directly to a provider (12%), charged to a credit card and being paid off over time (11%), are overdue or unmanageable (8%), or carry debts owed to a financial institution or collection agency due to loans taken to settle medical expenses (7%). A smaller segment reported owing money to family or friends to cover medical or dental costs (3%).

About 39% of Medicare-age adults with health care debt owe less than $1,000, with 19% owing less than $500. Conversely, 11% of those with health care debt owe $10,000 or more (data not shown). Even smaller amounts of debt can adversely affect credit ratings.

Health care debt among older adults originates from various sources, including common health care services (Figure 3). Nearly half of Medicare-age adults with health care debt attribute some of their bills to lab fees and diagnostic exams (49%), dental care (48%), and doctor consultations (41%). One-third (31%) cite emergency services as a factor, and one-quarter (24%) relate it to prescription drug costs. Dental care is a leading contributor to health care debt among Medicare-age adults, probably because traditional Medicare does not encompass dental services. (While most Medicare Advantage plans provide some dental coverage, the extent of this coverage can vary significantly, and enrollees might still face considerable out-of-pocket expenses.)

Only 6% of Medicare-age adults attribute some of their debt to costs for long-term care services and support, such as nursing home care, assisted living, or round-the-clock in-home health aide services. While utilized extensively by a smaller portion of the Medicare population, these services can be extremely expensive. For instance, in 2023, the median annual cost for a private room in a nursing home was $116,800, while round-the-clock home health aide services cost $288,288. These costs significantly surpass the median income ($36,000 per individual) and savings ($103,800 per individual) of the average Medicare beneficiary in 2023. Medicare does not typically cover these services, rendering them financially inaccessible for many older adults and resulting in potentially significant debt. (Survey results may underrepresent the expenses and related debt incurred by individuals in nursing homes, assisted living centers, and similar institutional setups, although the survey does account for debt related to long-term services and supports incurred by other family members.)

The financial implications of health care debt can be long-lasting. Nearly 30% of Medicare-age adults with health care debt (29%) reported that their household has been contacted by a collection agency due to medical or dental bills, while one-quarter (23%) indicated that their credit score has suffered as a result of health care debt (Figure 4). For retirees facing health care debt, such consequences may be challenging to reverse, complicating the acquisition of affordable credit in the future. The Consumer Financial Protection Bureau recently suggested a regulatory change aimed at removing most health care bills from credit reports and preventing lenders from considering medical information in loan decisions, intending to alleviate the burden of health care debt for US adults and protect against coercive credit reporting issues.

Forty-two percent of Medicare-age adults with health care debt report that they or another household member have reduced spending on essential items (42%) or depleted a significant portion of their savings (39%) in the last five years due to their health care debt (Figure 5). One-third have withdrawn money from long-term savings accounts like retirement funds (34%) or increased their credit card debt for non-medical expenditures (31%), and one in five have borrowed money (21%) or delayed payment of other bills (18%). Such sacrifices can pose serious risks to financial stability and overall well-being, potentially perpetuating the cycle of health care debt by leaving older adults with fewer resources for necessary health-related expenses.

Sixty-two percent of Medicare-age adults with health care debt (62%) report that they or another household member have delayed, missed, or sought alternatives for necessary health care or prescription medications due to expenses (Figure 6). Nearly half (48%) of these adults postponed necessary medical care in the past year, two in five (43%) opted for home remedies or over-the-counter medicines instead of visiting a healthcare provider, and one-third advised against getting a recommended medical test or treatment (31%) or reduced their prescribed medication dosage by skipping doses, cutting pills, or not filling their prescriptions (28%).

If you’re in a relationship deemed a domestic partnership, your access to your domestic partner’s health insurance, or their access to yours, will depend on where you live and your health plan’s rules.

Here’s what you need to know:

Frequently asked questions about domestic partner health insurance