Seven Million People with Medicare Spend More Than 10% of Income on Part B Premiums – The Reconciliation Bill Could Drive the Number Higher

Most people with Medicare are required to pay a monthly premium for enrollment in Medicare Part B, which provides coverage for physician visits and other outpatient services. In 2025, the standard Part B premium is $185 per month, up from $174.70 in 2024. People with relatively low incomes and limited financial resources can qualify for the Medicare Savings Programs, through which state Medicaid programs provide financial assistance with Medicare premiums and cost sharing. However, provisions in the GOP’s budget reconciliation bill currently moving through Congress would make it harder for people to enroll in these programs. The Congressional Budget Office estimates 1.3 million Medicare beneficiaries would lose access to these Medicaid benefits, meaning some low-income Medicare beneficiaries would lose Part B premium assistance. Many people with Medicare are facing a relatively high financial burden associated with paying Part B premiums, and the reconciliation bill could drive that number higher.

Over one in ten (12% or 7.4 million) of the 61 million Medicare beneficiaries enrolled in Part B in 2024 spent more than 10% of their annual per capita income on Part B premiums. Another 5 million spent between 8% and 10% of their income on Part B premiums, meaning that altogether, over one in five (21% or 12.5 million) people with Medicare Part B spent more than 8% of their annual per capita income on Part B premiums in 2024 (Figure 1). For roughly half of Medicare beneficiaries enrolled in Part B in 2024 (30.7 million), the Part B premium accounted for a smaller share of their annual per capita income – 6% or less. These estimates, which are based on income data from the Dynamic Simulation of Income Model (DYNASIM), highlight the burden of Part B premiums for the many Medicare beneficiaries living with modest means.

The monthly Part B premium imposes a relatively large financial burden on lower-income Medicare beneficiaries who are not enrolled in the Medicare Savings Programs. The 7 million beneficiaries who spent at least 10% of their annual income on Part B premiums in 2024 by definition had per capita income of $21,000 or less per person, based on the 2024 monthly Part B premium of $174.70 (or $2,100 for the year). An individual with income of this amount would have been just above the upper threshold to qualify for the Medicare Savings Programs in 2024, which was around $20,600 (135% of the federal poverty guidelines that year).

Delaying implementation of the rules intended in part to streamline enrollment in the Medicare Savings Programs, as proposed in the House-passed budget reconciliation bill, or prohibiting their implementation, as proposed by the Senate, would result in the loss of valuable financial protections under Medicaid for some low-income Medicare beneficiaries, who would then be responsible for paying Part B premiums (and possibly also Medicare deductibles and cost sharing). These costs would represent a relatively substantial share of their income, as illustrated in another KFF analysis showing that in 2025, the $185 monthly Part B premium would represent nearly 20% of the monthly $967 Supplemental Security Income (SSI) benefit for a low-income Medicare beneficiary receiving SSI. This individual would be automatically enrolled in a Medicare Savings Program under the federal rule proposed for delayed implementation in the reconciliation bill.

Factoring in Medicare cost-sharing requirements, such as the annual Part A and Part B deductibles ($1,676 and $257 in 2025), the same individual, if they paid those full cost-sharing amounts, would have costs consuming at least one-third or more of their SSI benefit for the year. With Medicare Part B premiums projected to increase to nearly $2,500 in 2026 and more than $4,000 by 2034, the financial burden on Medicare beneficiaries associated with paying for Part B coverage is likely to grow.