A new KFF analysis shows that most Medicare beneficiaries live on relatively low incomes and have modest financial resources for retirement – posing a risk to their economic well-being, particularly if they were to have a major, unanticipated expense, such as a need for long-term nursing home care.
The financial picture is especially bleak among Black and Hispanic Medicare beneficiaries, who tend to have lower incomes, savings, and home equity than White beneficiaries, the analysis shows. Women have lower incomes and less savings than men, and beneficiaries’ income and savings tend to decline with age.
Key takeaways from the analysis include:
Having limited income and savings may prove challenging for Medicare beneficiaries as they grow older, particularly for older women, who tend to live longer than men and may be more likely to need expensive long-term services and supports. Nationally, the median annual cost of a private room in a nursing home was $108,405 in 2021 – more than the average Medicare beneficiary has in savings — and $54,000 for an assisted living facility. (Medicare does not cover such care except in limited circumstances. Some poorer beneficiaries may also qualify for Medicaid, the nation’s primary payer for nursing home care.)
The full analysis of the income, assets, and home equity of Medicare beneficiaries, overall and by age, race and ethnicity, and gender, is available on kff.org. The analysis relies on data derived from the Urban Institute’s Dynamic Simulation of Income Model (DYNASIM4) for 2023.