Hospitals account for 30% of total health care spending—$1.4 trillion in 2022—with expenditures projected to rise rapidly through 2032, contributing to higher costs for families, employers, Medicare, Medicaid, and other public payers. Policymakers have sought to reduce spending on hospital care as part of a broader effort to make health care more affordable and reduce the federal deficit. In recent years, for example, there has been bipartisan interest in site-neutral payment reforms, which would reduce Medicare program and beneficiary spending by aligning Medicare rates for certain outpatient services across care settings. The next Trump administration and Republicans in Congress may also seek to cut Medicaid spending, which could result in fewer dollars flowing to hospitals.

At the same time, there are ongoing questions about the effects of policies that reduce spending on hospital finances and access to care, with particular attention to the implications for rural and safety-net hospitals. For example, Senators Cassidy and Hassan recently released a framework for site-neutral payment reforms that would reinvest savings into rural and high-needs hospitals.

This analysis examines hospital margins for non-federal general short-term hospitals in the U.S from 2018 through 2023, the most recent year with virtually complete cost report data. The analysis is based on RAND Hospital Data, a cleaned version of Medicare cost reports. Total margins are defined as net income (revenues minus expenses) divided by revenues. This analysis focuses on operating margins (instead of total margins) to examine the extent to which hospitals profited or lost money on patient care and other operating activities, rather than on other sources, such as investments. Operating margins are approximated using the same calculation as for total margins after subtracting reported investment income and charitable contributions from revenues. Results for groups of hospitals reflect aggregate margins based on total relevant revenues and expenses, which is equivalent to the average margin after weighting hospitals by their revenue. A number of datasets provide information about hospital finances, though each has limitations, and cost reports are no exception. See Methods for additional information.

Key Takeaways

• Aggregate hospital margins rebounded in 2023 following a large decrease in 2022. This is true for operating margins, which decreased from 8.9% in 2021 to 2.7% in 2022 before increasing to 5.2% in 2023. It is also true for total margins, which decreased from 10.8% in 2021 to 2.3% in 2022 before increasing to 6.4% in 2023. However, both aggregate operating margins and total margins remained below 2019 pre-pandemic levels in 2023.
• Aggregate operating margins were positive in 2023 (5.2%), but about two in five hospitals (39%) had negative margins in that year. About one in five (22%) had operating margins less than -5%.
• Operating margins were higher than average among for-profit hospitals, hospitals with a high share of commercial discharges, and system-affiliated hospitals in 2023. For-profit hospitals had higher operating margins than nonprofit and government hospitals (14.0% versus 4.4% and 3.4%, respectively). Hospitals with a relatively high commercial share of total discharges had higher operating margins than hospitals with low shares (7.5% versus 3.3% among the top versus bottom quarter based on commercial share, respectively) (quartiles are weighted by revenues throughout). System-affiliated hospitals had higher operating margins than independent hospitals (5.8% versus 2.5%).
• Operating margins in 2023 were also higher than average among hospitals with relatively high commercial prices. Operating margins were relatively high among hospitals with commercial prices that were greater than 300% of Medicare rates, especially among hospitals with high commercial shares. In contrast, operating margins were relatively low among hospitals with high Medicaid shares (see below).
• Operating margins were lower than average among hospitals with high Medicaid shares, which was true in both rural and urban areas. Operating margins were lower among hospitals with a relatively high Medicaid share (2.3% among the top quarter of hospitals based on Medicaid shares versus 7.0% among the bottom quarter). Operating margins were relatively low for hospitals with high Medicaid shares in both rural and urban areas (1.7% and 2.3%, respectively).
• Operating margins were lower than average among rural hospitals in 2023. Operating margins were lower among hospitals in rural than urban areas (3.1% versus 5.4%, respectively) and were especially low among hospitals in rural areas that were not micropolitan areas (1.8%), i.e., that did not include and were not closely connected to any substantial population nucleus. However, operating margins were higher among for-profit than nonprofit rural hospitals (8.5% versus 3.5%, respectively). Operating margins were also lower among hospitals with Medicare rural designations, particularly among low-volume hospitals and Medicare dependent hospitals (1.7% and 1.8%, respectively).

Aggregate Hospital Margins Rebounded in 2023 Following a Large Decrease in 2022

Aggregate operating margins decreased from 8.9% in 2021 to 2.7% in 2022 before increasing to 5.2% in 2023 (Figure 1). Similarly, aggregate total margins decreased from 10.8% in 2021 to 2.3% in 2022 before increasing to 6.4% in 2023. While operating and total margins both increased in 2023, they remained below 2019 pre-pandemic levels (6.5% for operating margins and 7.6% for total margins). Operating margins were at a record high in 2021 for hospitals reimbursed under the inpatient prospective payment system (IPPS) but were lower in 2022 than they had been since 2008—i.e., during the Great Recession—according to related analyses from the Medicare Payment and Advisory Commission.

Decreases in operating margins in 2022 were likely due to the erosion of COVID funds, costs associated with labor shortages, and increased supply expenses due to high inflation rates, among other factors. Improvements in 2023 may have been due a number of factors, including stabilizing labor expenses, decreases in average length of stay, and increases in revenue.

Some of the major credit rating agencies have reported relatively stable operating margins among rated not-for-profit health systems from 2022 to 2023 and have projected gradual improvements over time. These trends may differ from the main analysis here because, among other factors, they look at not-for-profit systems and report median (rather than aggregate or weighted average) operating margins. Industry reports, based on a non-representative sample of hospitals, indicate that finances have improved through October 2024 relative to 2022.

Aggregate Operating Margins Were Positive in 2023, But About Two in Five Hospitals (39%) Had Negative Margins

While aggregate operating margins were positive in 2023 (5.2%), operating margins varied substantially across hospitals. On one end of the spectrum, about one in seven hospitals (15%) had relatively high operating margins of at least 15%, while about one in five (22%) had positive but relatively modest margins of less than 5%, including about one in ten (11%) with positive margins of less than 2.5% (not shown). Having positive but modest margins may signal financial challenges for hospitals.

At the same time, about two in five hospitals (39%) had negative margins, and about one in five (22%) had margins of less than -5%. While some of these hospitals may be able to weather financial challenges for a period of time if they have sufficient days of cash on hand, those without sufficient days of cash on hand could be especially challenged to maintain current services or remain open. Based on a prior KFF analysis, the majority of nonprofit hospitals and health systems analyzed with negative operating margins had at least “strong” levels of days cash on hand in 2022, though that analysis was based on data that underrepresent entities likely to be more financially vulnerable.

Operating Margins Were Higher Than Average Among For-Profit Hospitals, Hospitals With High Commercial Discharge Shares, and System-Affiliated Hospitals and Were Lower Than Average Among Hospitals With Low Market Shares in 2023

For-profit hospitals—which accounted for 17% of facilities—had much higher operating margins than nonprofit and government hospitals (14.0% versus 4.4% and 3.4%, respectively) (see Figure 3). For-profit hospitals may have a greater motivation to operate more efficiently and engage in other strategic behaviors to increase their margins, such as focusing on relatively profitable services lines, dropping unprofitable service lines (like obstetrics), or locating in wealthier areas that have more residents with commercial insurance and fewer with public or no insurance. As is the case throughout this analysis, differences in operating margins across groups of hospitals could reflect a variety of factors.

Operating margins were also higher than average among hospitals where commercially-insured patients accounted for a relatively large share of discharges. For example, operating margins were 7.5% versus 3.3% when comparing hospitals in the top versus bottom quarter based on commercial shares (quartiles are weighted by revenues throughout). One factor that likely plays a role in these results is that commercial payers generally reimburse hospital care at higher rates than Medicare and Medicaid, the two other major payers. For instance, a KFF review found that commercial prices were nearly double Medicare rates for hospital services when averaging findings across studies, and one recent analysis found that commercial prices were 254% of Medicare rates for hospital services on average in 2022.

Operating margins were also higher among hospitals affiliated with a health system than independent hospitals (5.8% versus 2.5%). Higher operating margins among system-affiliated hospitals could reflect the effects of consolidation, among other factors. Consolidation might lead to higher margins, for example, to the extent that merging providers are able to reduce operating costs or—as suggested by a large body of evidence—charge higher prices by having greater market power.

Finally, operating margins were lower among hospitals that accounted for a relatively low share of hospital discharges in their market. For example, operating margins were 2.0% versus 7.3% when comparing the bottom versus top quarter of hospitals based on their market share (or the market share of the health system that they are a member of, as applicable). Hospitals with large market shares may be able to negotiate higher rates and, if part of a larger system, benefit from economies of scale, among other factors that could drive higher margins.

Operating Margins in 2023 Were Higher Than Average Among Hospitals With High Prices, Especially Among Those With a Relatively High Commercial Shares

Operating margins were relatively high among hospitals with commercial prices that were greater than 300% of Medicare rates (8.9%) and were even higher (10.5%) among those with a relatively high commercial share of total discharges (i.e., with at least a 25% commercial share) (see Figure 4). In contrast, operating margins were relatively low among hospitals with commercial prices below 200% of Medicare rates (1.0%) and were even lower (0.8%) among those with low commercial patient shares. This aligns with an analysis from researchers at the Urban Institute and Harvard that found that high commercial prices were associated with higher operating margins and more days of cash on hand.

Policymakers have explored a number of options to rein in commercial prices. This analysis suggests that hospitals with the highest prices and largest commercial shares as a group are in a better position to absorb any restraints on prices, though the impact would vary across hospitals.

While Operating Margins Were Higher Than Average Among Hospitals With High Commercial Shares in 2023, They Were Lower Than Average Among Hospitals With High Medicaid Shares, Which Was True in Both Urban and Rural Areas

Hospitals with high commercial shares had relatively high operating margins (e.g., 7.5% versus 3.3% when comparing the top versus bottom quarter of hospitals weighted by revenues based on commercial share) (see Figure 3 above) while hospitals with high Medicaid shares had relatively low operating margins (e.g., 2.3% versus 7.0% when comparing the top versus bottom quarter of hospitals weighted by revenues based on Medicaid share) (see Figure 5).

Operating margins in 2023 were relatively low among hospitals with high Medicaid shares in both rural and urban areas (1.7% and 2.3%, respectively) (see Figure 5). In comparison, the operating margin among all hospitals was 5.2% in 2023. While operating margins were lower among hospitals in rural than urban areas overall (3.1% versus 5.4%, respectively) (see Figure 7 below), hospitals with high Medicaid shares in urban areas stand out as another example of hospitals that were struggling more than others.

Some policymakers are especially attentive to the financial stability of safety-net hospitals given their role in providing access to patients with limited resources and other sources of vulnerability. The share of patients covered by Medicaid may signal the extent to which a given hospital cares for a disproportionate share of low-income patients (see Methods for more detail).

Operating Margins Were Also Lower Than Average Among Hospitals With High Medicare Shares in 2023

Operating margins were 4.3% in 2023 among hospitals in the top quarter based on Medicare share of discharges compared to 5.8% among hospitals in the bottom quarter (see Figure 6). Part of this difference may reflect the fact that hospitals with high Medicare shares were more likely to be in rural areas (54% of hospitals in the top quarter of Medicare shares were in rural areas versus 23% of the hospitals in the bottom quarter). As described below, rural hospitals had lower than average operating margins in 2023.

While operating margins among hospitals in the top quarter of Medicare shares were lower than among hospitals overall, they were higher relative to hospitals in the top quarter of Medicaid shares (4.3% versus 2.3%, respectively).

Operating Margins Were Lower Than Average Among Rural Hospitals in 2023

Operating margins were lower among hospitals in rural versus urban (nonmetropolitan versus metropolitan) areas (3.1% versus 5.4%, respectively) and were especially low among hospitals in rural areas that were not micropolitan areas (1.8%) (Figure 7), i.e., that did not include and were not closely connected to any substantial population nucleus (see Methods for more about urban and rural definitions). While 48 states in this analysis had at least one rural hospital, rural hospitals were distributed unevenly across the country. For example, a quarter of rural hospitals were located in Iowa, Kansas, Minnesota, Nebraska, or Texas. Rural hospitals often face unique financial challenges, such as low patient volume, which may lead to higher costs on average and limit the ability to offer specialized services.

Operating margins varied across rural hospitals in 2023, as was the case when looking at hospitals overall. For example, more than four in ten (44%) rural hospitals had negative operating margins while more than half (56%) had positive operating margins, including one in ten (10%) with operating margins of at least 15%. Operating margins were higher among rural for-profit than rural non-profit hospitals (8.5% versus 3.5%) and lower (0.3%) among rural government hospitals. Operating margins were also higher among system-affiliated versus independent rural hospitals (4.8% versus 0.6%, respectively).

Operating margins were lower among hospitals with Medicare rural designations than other hospitals. Low-volume hospitals (hospitals with few discharges that are a minimum distance from other facilities) and Medicare dependent hospitals (small rural hospitals with high Medicare inpatient shares) had the lowest operating margins (1.7% and 1.8%, respectively) (Figure 7). Operating margins were also lower on average among critical access hospitals (rural hospitals with at most 25 beds that with some exceptions are a minimum distance from other facilities) and sole community hospitals (hospitals that are the only source of short-term, acute inpatient care in a region) relative to hospitals without a Medicare rural designation (4.1% and 4.2%, respectively, versus 5.7%). About half of low-volume, Medicare dependent and sole community hospitals had negative operating margins in 2023 (52%, 52%, and 49%, respectively), as did 40% of critical access hospitals. A smaller share (35%) of hospitals without a Medicare rural designation had negative operating margins.

Senators Cassidy and Hassan recently released a framework for site-neutral payment reforms that some of the savings be reinvested into sole community, low-volume, and Medicare dependent hospitals. As noted above, each of these groups had lower operating margins than did hospitals without a rural designation. The framework does not mention new funds for critical access hospitals, which would likely be exempt from site-neutral payment reforms.

Policymakers have had ongoing concerns about the financial health of rural hospitals and the implications for access to care and the local economy. At the same time, it may be difficult to sustain some rural hospitals—such as those in areas with shrinking populations—and some have argued that care in at least some scenarios should be moved towards other settings, including telehealth, outpatient facilities, and larger regional hospitals.

Operating Margins Were Higher Than Average Among Hospitals With a Large Number of Beds and Among Minor Teaching Hospitals in 2023

Hospitals with greater than 500 beds had higher operating margins (6.3%) than those with fewer beds (e.g., 3.9% among hospitals with 51 to 100 beds) (see Figure 8). Minor teaching hospitals had higher margins (6.2%) than major teaching (4.3%) and non-teaching (5.1%) hospitals. Minor teaching hospitals are defined as facilities with interns or residents but at most one full-time equivalent intern or resident for every four beds, and major teaching hospitals are defined as facilities with more.

Operating Margins Varied Across States in 2023

Aggregate operating margins were at least 10% in five states (Alaska, Florida, Texas, Utah, and Virginia) but negative in four states (Michigan, New Mexico, Washington, and Wyoming) (see Figure 9). Differences likely reflect a variety of unique state circumstances, such as demographics, hospital ownership and cost structure, commercial reimbursement rates, and state and local health and tax policy. For instance, operating margins may have been high in Texas in part because the state has a relatively large number of for-profit hospitals (which have higher operating margins on average), among other factors. The same is true of Florida, which may have also had high operating margins in part due to the relatively high commercial prices in the state. As an example of a state on the other end of the spectrum, margins may have been relatively low in Wyoming in part because the vast majority of hospitals are in rural areas (92% compared to 40% of all hospitals), among other factors. It is also possible that a small number of hospitals with large revenue could have a large impact on aggregate operating margins, especially in states with relatively few hospitals, like Alaska.

Appendix

This report provides an analysis of donor government funding for family planning in low- and middle-income countries in 2023, the most recent year available, as well as trends over time. It includes both bilateral funding from donor governments and their contributions to the United Nations Population Fund (UNFPA). It is part of an effort by KFF to track such funding that began after the London Summit on Family Planning in 2012. Overall, donor government funding for family planning increased in 2023, returning to prior year levels, but still below its peak in 2019.

Key findings include the following:

• Family planning funding from donor governments was US$1.47 billion in 2023. Most funding is provided bilaterally (US$1.4 billion or 95%). The remainder – US$69.6 million (5%) – is for multilateral contributions to UNFPA’s core resources, adjusted for an estimated family planning share.
• This represents an increase of 7% (US$101.1 million) in 2023 compared to US$1.37 billion in 2022 and is a return to prior year levels, but still below its peak reached in 2019 (US$1.58 billion).¹ 
• The overall increase was due to increased bilateral funding from most donor governments; multilateral funding (contributions to UNFPA’s core resources) declined slightly largely due to decreases by Germany, Sweden, and the U.S.² 
• Total funding increased from five donor governments in 2023 (Canada, Germany, the Netherlands, Norway, and the U.K.).³  Funding from the U.S. remained flat, and three countries decreased – Australia, Denmark, and Sweden.⁴  These trends were the same after accounting for exchange rate fluctuations, except for Sweden, which increased in currency of origin.⁵ 
• The U.S. continued to be the largest donor to family planning in 2023, accounting for 40% (US$582.5 million) of total funding from governments, followed by the Netherlands (US$246.5 million, 17%), the U.K. (US$198.6 million, 13%), Sweden (US$124.5 million, 8%) and Canada (US$112.2 million, 8%). However, when family planning funding is standardized by the size of donor economies, the Netherlands ranked first, followed by Sweden, and Norway; the U.S. ranked 7th.

The future of donor government support for family planning, however, is uncertain. A second Trump administration will almost certainly see an end to U.S. support for UNFPA, and proposed cuts to bilateral funding, as was seen in his first term. Moreover, the extent to which other donors will fill in any gaps created by the U.S. is unclear, as they face their own financial pressures and changes in leadership. Such uncertainties, and potential funding reductions, would create new challenges for reaching people in low- and middle-income countries with family planning services.

Introduction

This report provides data on donor government funding for family planning activities in low- and middle-income countries in 2023, the most recent year available, as well as trends over time. It is part of an effort by KFF that began after the London Summit on Family Planning in 2012 and includes data from all 32 members of the Organisation for Economic Co-operation and Development (OECD)’s Development Assistance Committee (DAC). Data are collected directly from the largest donors and supplemented with data from the DAC. Direct data collection was carried out for nine donor governments that account for 97% of total funding for family planning. Both bilateral assistance and core contributions to UNFPA, adjusted for a family planning share, are included. For more detail, see methodology.

Findings

Total Funding

In 2023, donor government funding for family planning through bilateral and multilateral channels totaled US$1.47 billion, an increase of US$101.1 million, or 7%, compared to 2022 (US$1.37 billion). While this marks a return to prior year levels, it is below the peak level reached in 2019 (US$1.58 billion) (see Figure 1 & Table 1). The increase was entirely due to increased bilateral support from the majority of donor governments; multilateral funding decreased slightly (see “Bilateral Funding” and “Multilateral Funding” sections below).

Total funding increased from five donor governments in 2023 (Canada, Germany, the Netherlands, Norway, and the U.K.).⁶  Funding from the U.S. remained flat, and three countries decreased – Australia, Denmark, and Sweden.^7 ,8  These trends were the same after accounting for exchange rate fluctuations, except for Sweden, which increased in currency of origin.⁹  There were, however, some differences among the donor governments in the amount of bilateral and multilateral funding provided between 2022 and 2023 (see Bilateral and Multilateral sections below).

The vast majority of donor government funding for family planning is provided bilaterally (95%). The remainder (5%) is for multilateral contributions to UNFPA’s core resources, adjusted based on the share used to support family planning activities. All donor governments provided a larger share of their family planning funding bilaterally (see Figure 2).

The U.S. continued to be the largest government donor to family planning in 2023, accounting for 40% (US$582.5 million) of total donor government funding (see Figure 3). The Netherlands was the second largest donor (US$246.5 million or 17%), followed by the U.K. (US$198.6 million or 13%), and Sweden (US$124.5 million or 8%).

Bilateral Funding

Bilateral disbursements for family planning from donor governments – that is, funding disbursed by a donor on behalf of a recipient country or region – totaled US$1.40 billion in 2023, an increase of US$111.2 million, or 9%, compared to 2022 (US$1.29 billion) (see Appendix Table 1).

Bilateral funding from six donor governments (Canada, Germany, the Netherlands, Norway, Sweden, and the U.K.) increased in 2023 (see Figure 4).¹⁰  Two donor governments (Australia and Denmark) decreased funding in 2023, while the U.S. remained flat. These trends were the same after accounting for exchange rate fluctuations.

The U.S. and U.K. have been the top two donors over the entire period since the London Summit (2012-2023). However, U.S. funding has been relatively flat while funding from the U.K., which fluctuated over the period, has declined in recent years. When these two are removed, bilateral funding from the other donor governments has generally increased over the period; although, there have been fluctuations (see Figure 5).

Multilateral Funding

While the majority of donor government assistance for family planning is provided bilaterally, donors also provide support for family planning activities through core contributions to the United Nations Population Fund (UNFPA) (where donors direct or earmark funding for specific family planning activities, such as for UNFPA Supplies, these are included as part of bilateral funding). In 2023, UNFPA estimates that 18% of its core funding was directed to family planning activities.¹¹ 

These totaled US$69.6 million in 2023, a decrease of US$10.1 million compared to 2022 (US$79.7 million) (see Appendix Table 2). The decrease was entirely due to a decline in total contributions to UNFPA’s core resources – largely from Germany, Sweden, and the U.S, rather than a change in the share of core resources UNFPA directed to family planning activities.^12 ,13  Norway was the largest donor government to UNFPA’s core resources, followed by Germany, Sweden, and the Netherlands.

Fair Share

We looked at two different measures to assess the relative contributions of donor governments, or “fair share”, to family planning (see Table 2) as follows: rank by share of total donor government disbursements for family planning, and rank by funding for family planning per US$1 million in gross domestic product (GDP).

• Rank by share of total donor government funding for family planning: By this measure, the U.S. ranked first in 2022, followed by the Netherlands, the U.K., Sweden, and Canada. The U.S. has consistently ranked #1 in absolute funding amounts over the entire period since the London Summit (2012-2023).
• Rank by funding for family planning per US$1 million GDP: When funding for family planning is standardized by the size of donor economies (GDP per US$1 million), the Netherlands ranks at the top, followed by Sweden, Norway, and the U.K. (Figure 6); the U.S. ranks 7th.

Methods

Totals presented in this analysis include both bilateral funding for family planning in low- and middle-income countries as well as the estimated share of donor government contributions to UNFPA’s core resources that are used for family planning. Amounts are based on analysis of data from the 32 donor government members of the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) in 2023 who had reported Official Development Assistance (ODA). Bilateral and multilateral data were collected from multiple sources.

Bilateral Funding:

Bilateral funding is defined as any earmarked (family planning designated) amount and includes family planning-specific contributions to multilateral organizations (e.g., non-core contributions to UNFPA Supplies). For purposes of this analysis, funding was counted as family planning if it met the OECD CRS purpose code definition: “Family planning services including counselling; information, education and communication (IEC) activities; delivery of contraceptives; capacity building and training.”

The research team collected the latest bilateral funding data directly from nine governments: Australia, Canada, Denmark, Germany, the Netherlands, Norway, Sweden, the United Kingdom, and the United States during 2023 (see Appendix Table 3). Direct data collection from these donors was desirable because they represent the preponderance of donor government assistance for family planning and the latest official statistics – from the Organisation for Economic Co-operation and Development (OECD) Creditor Reporting System (CRS) (see: http://www.oecd.org/dac/stats/data) – do not include all forms of international assistance (e.g., funding to countries such as Russia and the Baltic States that are no longer included in the CRS database). In addition, the CRS data may not include certain funding streams, such as family planning components of mixed-purpose grants to non-governmental organizations, provided by donors. Data for all other OECD DAC member governments – Austria, Belgium, Czech Republic, the European Union, Estonia, Finland, France, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Lithuania, Luxembourg, New Zealand, Poland, Portugal, the Slovak Republic, Slovenia, Spain, and Switzerland – which collectively accounted for approximately 3 percent of bilateral family planning disbursements, were obtained from the OECD CRS database and are from 2022 calendar year.

For some donor governments, it was difficult to disaggregate bilateral family planning funding from broader population, reproductive and maternal health totals, as the two are sometimes represented as integrated totals. In other cases, funding for family-planning-related activities provided in the context of other official development assistance sectors (e.g., humanitarian assistance, education, civil society) was included if identifiable (e.g., if donors indicate specific family planning percentages for mixed-purpose projects, or if it was possible to identify family planning specific funding based on project titles and/or descriptions).

With some exceptions, bilateral assistance data represent disbursements. A disbursement is the actual release of funds to, or the purchase of goods or services for, a recipient. Disbursements in any given year may include disbursements of funds committed in prior years and in some cases, not all funds committed during a government fiscal year are disbursed in that year. In addition, a disbursement by a government does not necessarily mean that the funds were provided to a country or other intended end-user. Enacted amounts represent budgetary decisions that funding will be provided, regardless of the time at which actual outlays, or disbursements, occur. In recent years, most governments have converted to cash accounting frameworks, and presented budgets for legislative approval accordingly; in such cases, disbursements were used as a proxy for enacted amounts.

Amounts presented are for the fiscal year period, which vary by country. The U.S. fiscal year runs from October 1-September 30. The Australian fiscal year runs from July 1-June 30. The fiscal years for Canada and the U.K. are April 1-March 31. Denmark, Germany, the Netherlands, Norway, and Sweden use the calendar year. The OECD uses the calendar year, so data collected from the CRS for other donor governments reflect January 1-December 31. Most UN agencies use the calendar year, and their budgets are biennial.

All data are expressed in US dollars (USD). Where data were provided by governments in their currencies, they were adjusted by average daily exchange rates to obtain a USD equivalent, based on foreign exchange rate historical data available from the U.S. Federal Reserve (see: http://www.federalreserve.gov/) or in some cases from the OECD. Funding totals presented in this analysis should be considered preliminary estimates based on data provided and validated by representatives of the donor governments who were contacted directly.

Specific notes pertaining to the donor governments where direct data collection was conducted are as follows:

• Project-level data were reviewed for Canada, Denmark, Germany, the Netherlands, Norway, and Sweden to determine whether all or a portion of the funding could be counted as family planning.
• Project-level data were also reviewed for France for 2012-2020, but comparable data were not available for 2021-2023, so totals for these years are based on the OECD DAC CRS database. Totals for 2021-2023 will be updated once comparable data become available. Starting with the report presenting 2022 funding amounts, totals for France were included under the amounts presented for all other DAC members; prior reports presented totals for France separately.
• Funding attributed to Australia and the United Kingdom is based on a revised Muskoka methodology as agreed upon by donors at the London Summit on Family Planning in 2012.
• For the U.S., funding represents final, Congressional appropriations (firm commitments that will be spent) to the U.S. Agency for International Development (USAID), rather than disbursements, which can fluctuate from year-to-year due to the unique nature of the U.S. budget process (unlike most other donors, U.S. foreign assistance funding may be disbursed over a multi-year period). U.S. totals for 2017-2020 also include some funding originally appropriated by Congress for UNFPA that was transferred to the USAID family planning & reproductive health (FP/RH) account due to specific provisions in U.S. law including the Kemp-Kasten amendment (see KFF “UNFPA Funding & Kemp-Kasten: An Explainer”).

Multilateral Funding:

UNFPA core contributions were obtained from United Nations Executive Board documents and correspond to amounts received during the 2023 calendar year, regardless of which contributor’s fiscal year such disbursements pertain to. Data were already adjusted by UNFPA to represent a USD equivalent based on date of receipts. UNFPA estimates of total family planning funding provided from core resources were obtained through direct communications with UNFPA representatives for 2012-2021; family planning funding estimates from UNFPA’s core resources for 2022-2023 are based on amounts reported on UNFPA’s Transparency Portal and designated as for “Ending the Unmet Need for Family Planning”.

UNFPA’s core resources are meant to be used for both programmatic activities (family planning, population and development, HIV/AIDS, gender, and sexual and reproductive health and rights) as well as operational support. Donor government contributions to UNFPA’s core resources were adjusted to reflect the share of core resources supporting family planning activities in a given year based on information from UNFPA. For instance, in 2023, UNFPA reported expenditures totaling US$500 million from core resources including US$92 million for family planning activities, which results in an estimated 18% of a donor government’s core contribution in 2023 being included in its total funding for family planning.^14 ,15 

Other than core contributions provided by governments to UNFPA, un-earmarked core contributions to United Nations entities, most of which are membership contributions set by treaty or other formal agreement (e.g., United Nations country membership assessments), are not identified as part of a donor government’s family planning assistance even if the multilateral organization in turn directs some of these funds to family planning. Rather, these would be considered as family planning funding provided by the multilateral organization and are not included in this report.

1. Family planning totals are different from those reported last year due to updated data received after the 2023 report was published. Donor amounts do not exactly sum up to total amounts due to rounding. ↩︎
2. The U.S. decline in its core contribution to UNFPA in 2023 was due to a one-time increase that occurred in the previous year. In 2022, the U.S. core contribution to UNFPA included the direct appropriation (US$30.6 million) provided by Congress as well as a one-time US$20 million contribution provided by the Biden administration through available funding from the American Rescue Plan Act of 2021 (P.L. 117-2). ↩︎
3. In 2023, the U.K. Foreign, Commonwealth and Development Office (FCDO) undertook an update of its family planning funding data including a move from reporting disbursements by fiscal year to calendar year. Updated data for the entire period were not at the time of publication. As such, U.K. totals for 2021-2023 are based on the calendar year; totals for 2012-2020 are still based on the U.K. fiscal year and will be updated in the next report (overall trends are not expected to change as a result of the forthcoming update). The 2021 and 2022 totals previously reported were considered preliminary estimates and have been revised. All U.K. totals are based on the revised-Muskoka methodology. ↩︎
4. The assessment that total U.S. family planning funding was flat in 2023 compared to 2022 is based on the amounts specified by the U.S. Congress in annual appropriations bills. The family planning amounts specified by Congress were the same in 2022 and 2023. The U.S. family planning total for 2022 as presented in this report is slightly higher than 2023 due to a one-time additional contribution to UNFPA’s core resources provided by the Biden administration (see Multilateral section). ↩︎
5. In most cases, donor governments provide funding data in their currency of origin, which are converted to U.S. dollars for this report (see Methods). ↩︎
6. In 2023, the U.K. Foreign, Commonwealth and Development Office (FCDO) undertook an update of its family planning funding data including a move from reporting disbursements by fiscal year to calendar year. Updated data for the entire period were not at the time of publication. As such, U.K. totals for 2021-2023 are based on the calendar year; totals for 2012-2020 are still based on the U.K. fiscal year and will be updated in the next report (overall trends are not expected to change as a result of the forthcoming update). The 2021 and 2022 totals previously reported were considered preliminary estimates and have been revised. All U.K. totals are based on the revised-Muskoka methodology. ↩︎
7. The assessment that total U.S. family planning funding was flat in 2023 compared to 2022 is based on the amounts specified by the U.S. Congress in annual appropriations bills. The family planning amounts specified by Congress were the same in 2022 and 2023. The U.S. family planning total for 2022 as presented in this report is slightly higher than 2023 due to a one-time additional contribution to UNFPA’s core resources provided by the Biden administration (see Multilateral section). ↩︎
8. “Other DAC Countries”, which includes: Austria, Belgium, Czech Republic, European Union, Finland, France, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, New Zealand, Poland, Portugal, the Slovak Republic, Slovenia, Spain, and Switzerland, is not listed under any assessment of increasing, decreasing, or remaining flat because there may be differences among the donor governments included. ↩︎
9. In most cases, donor governments provide funding data in their currency of origin, which are converted to U.S. dollars for this report (see Methods). ↩︎
10. “Other DAC Countries”, which includes: Austria, Belgium, Czech Republic, European Union, Finland, France, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, New Zealand, Poland, Portugal, the Slovak Republic, Slovenia, Spain, and Switzerland, is not listed under any assessment of increasing, decreasing, or remaining flat because there may be differences among the donor governments included. ↩︎
11. The family planning share of UNFPA’s core resources is based on several sources including: expenditure totals as reported in UNFPA’s annual report; family planning expenditure totals as presented on UNFPA’s Programme Expenses Portal (see here), and direct communication with UNFPA (see Methods). ↩︎
12. The U.S. decline in its core contribution to UNFPA in 2023 was due to a one-time increase that occurred in the previous year. In 2022, the U.S. core contribution to UNFPA included the direct appropriation (US$30.6 million) provided by Congress as well as a one-time US$20 million contribution provided by the Biden administration through available funding from the American Rescue Plan Act of 2021 (P.L. 117-2). ↩︎
13. “Other DAC Countries”, which includes: Austria, Belgium, Czech Republic, European Union, Finland, France, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, New Zealand, Poland, Portugal, the Slovak Republic, Slovenia, Spain, and Switzerland, is not listed under any assessment of increasing, decreasing, or remaining flat because there may be differences among the donor governments included. ↩︎
14. UNFPA, “United Nations Population Fund, Statistical and financial review, 2023 - Annexes, Report of the Executive Director”; April, 2024. ↩︎
15. UNFPA, Transparency Portal (see here); accessed November 2024. ↩︎

More than half (54%) of eligible Medicare beneficiaries are enrolled in a private Medicare Advantage plan in 2024. People are drawn to Medicare Advantage because most plans offer extra benefits and lower cost sharing compared to traditional Medicare without supplemental insurance, usually for no additional premium (other than the Part B premium). Medicare Advantage is also popular among lawmakers in Congress, both Republicans and Democrats, as well as President-elect Trump, whose previous administration generally supported policies that provided increased flexibilities to insurers when designing and administering these private plans.

Though Medicare Advantage is a popular choice for Medicare beneficiaries, there is some evidence that people who use relatively more health care services are less likely to choose a private plan and more likely to choose traditional Medicare. Previous analyses from KFF and the Medicare Payment Advisory Commission (MedPAC) found that people who enroll in Medicare Advantage have lower Medicare spending in the years before they enroll than similar people who remain in traditional Medicare, even after controlling for health status. This pattern may be partly attributable to concerns about the tools Medicare Advantage plans typically use to manage utilization and costs, such as prior authorization requirements and provider network restrictions.

This analysis looks at traditional Medicare spending among people who choose to disenroll from Medicare Advantage and obtain coverage under traditional Medicare during the annual Medicare open enrollment period. It compares their traditional Medicare spending (Parts A and B) in the year following disenrollment to similar people who were continuously covered by traditional Medicare (see Appendix for characteristics of each group), using data from the Medicare Master Beneficiary Summary File (MBSF) for 2021 and 2022 (see Methods).

Key Takeaways

• Medicare spent 27% more, on average, for people who were covered by traditional Medicare after disenrolling from Medicare Advantage than for people who were continuously covered by traditional Medicare, after adjusting for differences in health status and other characteristics. This is a difference of $2,585 in Medicare spending per person, on average, between the two groups in 2022.
• Differences in Medicare spending between people who disenrolled from Medicare Advantage and beneficiaries continuously in traditional Medicare varied by health condition, ranging from 15% for people with pneumonia to 34% for people with diabetes. For example, among people with certain cancers, Medicare spending was 28% ($4,907) higher, on average, among those who disenrolled from Medicare Advantage than among people continuously covered by traditional Medicare.
• Differences in Medicare spending between people who disenrolled from Medicare Advantage and those continuously in traditional Medicare increased with age for Medicare beneficiaries ages 65 and over. For example, among people ages 85 and over the difference was 46% ($7,113) compared to 25% among people ages 65 to 69 ($1,843).
• Differences in Medicare spending between people who disenrolled from Medicare Advantage and beneficiaries continuously in traditional Medicare were larger among Black (55%, $5,203) and Hispanic (54%, $4,434) beneficiaries than White beneficiaries (25%, $2,464).
• People dually-eligible for Medicare and full Medicaid benefits who disenrolled from Medicare Advantage had spending that was 61% ($9,435) higher than their counterparts who were continuously in traditional Medicare, while the difference in spending for Medicare beneficiaries who do not receive Medicaid was 20% ($1,684).
• Skilled nursing facility spending accounted for the largest share of the difference in average Medicare spending per person between people who disenrolled from Medicare Advantage and those continuously in traditional Medicare (34%), followed by outpatient hospital spending (23%), and inpatient hospital spending (20%), with some variation by chronic conditions and other beneficiary characteristics.

The substantially higher Medicare spending among people who disenrolled from Medicare Advantage, on average, compared to similar people who were continuously covered by traditional Medicare raises several questions. First, why are some Medicare Advantage enrollees choosing to disenroll from Medicare Advantage rather than get the medical care they need from their plan, and why are they receiving more medical care in the year following disenrollment than similar people who have been continuously covered by traditional Medicare?

Second, given how challenging it can be for people with pre-existing conditions to purchase Medicare supplemental insurance (Medigap) if they switch to traditional Medicare, and concerns about potentially high out-of-pocket costs under traditional Medicare without supplemental coverage, what share of Medicare Advantage enrollees would want to switch to traditional Medicare, but feel they cannot afford to do so?

Third, does the current payment system adequately account for adverse selection into traditional Medicare, which leads to higher Medicare Advantage benchmarks and higher payments to Medicare Advantage plans? Additionally, to what extent does the pattern of higher utilization and spending among people who disenroll from Medicare Advantage, reduce the costs incurred by insurers, increasing their profits and contributing to their ability to offer supplemental benefits? Finally, how does higher Medicare spending among people who disenroll from Medicare Advantage impact Medicare spending, and to what extent does it place added strain on the Medicare Hospital Insurance Trust Fund and increase beneficiary premiums?

People who disenrolled from Medicare Advantage had Medicare spending that was 27% more, on average, than spending for similar people continuously covered by traditional Medicare

Overall, people who disenrolled from Medicare Advantage had Medicare spending that was 27% ($2,585) higher, on average, than those continuously covered by traditional Medicare, after adjusting for differences in health risk factors (Figure 1).

Several studies have found that certain groups of Medicare Advantage enrollees switch to traditional Medicare at higher rates, including beneficiaries in their last year of life, those with higher health needs, and those dually eligible for Medicare and Medicaid. Furthermore, some groups with high disenrollment rates, such as beneficiaries in their last year of life, have higher health care spending after they disenroll compared to similar beneficiaries who are long-time recipients of traditional Medicare.

This analysis shows that spending differences are not limited to those particularly high-need groups because the spending differences persist after controlling for health risk, though the magnitude of the difference is greater, on average, for high-cost beneficiaries. While prior research finds lower health care spending among people who enroll in Medicare Advantage, in the year prior to enrollment, this analysis shows that people who disenroll from Medicare Advantage use more services and incur higher Medicare costs in the year following disenrollment than similar beneficiaries who were continuously covered under traditional Medicare.

People who disenrolled from Medicare Advantage had higher spending, on average, than those continuously covered by traditional Medicare across all chronic health conditions examined

People who disenrolled from Medicare Advantage had higher Medicare spending, on average, across all chronic health conditions examined, after adjusting for other health risk factors, than those continuously covered by traditional Medicare (Figure 2, Appendix Table 2). Differences in average per person spending varied by condition, ranging from 15% ($5,187) for people with pneumonia to 34% ($4,586) for people with diabetes. The largest difference in Medicare spending per person in dollar terms between people who disenrolled from Medicare Advantage and those continuously in traditional Medicare was among people with Alzheimer’s disease or other dementias ($7,451), followed by stroke ($6,660), and atrial fibrillation ($6,147). Among people with certain cancers, including breast, colorectal, endometrial, lung, prostate, and urologic cancers, spending for people who disenrolled from Medicare Advantage was 28% ($4,907) higher than for people continuously covered by traditional Medicare.

People with greater health needs may see multiple health care providers and require numerous specialty services, resulting in a greater burden from the limited provider networks, prior authorization, and referral requirements Medicare Advantage plans often employ. Prior authorization is most often required for high-cost services, such as chemotherapy and other Part B drugs, inpatient hospital stays, and stays in skilled nursing facilities. In addition, narrow provider networks may limit available options for treatment of certain conditions. For instance, prior studies have found that Medicare Advantage enrollees are less likely than traditional Medicare beneficiaries to receive care from the highest rated hospitals for treatment of cancer or cancer-related surgical procedures.

Average differences in Medicare spending between people who disenrolled from Medicare Advantage and those continuously covered by traditional Medicare increased with age among beneficiaries ages 65 and older

Across all age groups, people who disenrolled form Medicare Advantage had higher Medicare spending, on average, than those continuously covered by traditional Medicare. Average differences in per person spending increased with age among older beneficiaries, from 25% ($1,843) among those ages 65-69 to 46% ($7,113) among those ages 85 and older. People under the age of 65, who qualify for Medicare due to long-term disability, have somewhat higher average spending per person than Medicare beneficiaries between the ages of 65 and 74, and the differences in spending among this group between those who disenrolled from Medicare Advantage and those continuously covered by traditional Medicare were also somewhat larger (39%, $3,348) (Figure 3).

Average differences in Medicare spending between people who disenrolled from Medicare Advantage and those continuously covered by traditional Medicare were higher among Black and Hispanic than White beneficiaries

Across all racial and ethnic groups examined, people who disenrolled from Medicare Advantage had higher Medicare spending, on average, than those continuously covered by traditional Medicare. Average differences in per person spending were approximately two times higher among Black (55%, $5,203) and Hispanic (54%, $4,434) beneficiaries than among White beneficiaries (25%, $2,464) (Figure 4).

Average differences in Medicare spending between people who disenrolled from Medicare Advantage and those continuously covered by traditional Medicare were higher among people dually eligible for Medicare and full Medicaid benefits

Among dual-eligible beneficiaries who qualified for full Medicaid benefits, those who disenrolled from Medicare Advantage had spending that was 61% ($9,435) higher, on average, than those continuously covered by traditional Medicare. Average differences in per person spending were smaller among beneficiaries who were not dual-eligible (20%, $1,684) and among dual-eligible beneficiaries who qualified for assistance with Medicare premiums, and in some cases cost sharing, but not full Medicaid benefits (partial-benefit dual-eligible beneficiaries) (49%, $4,114) (Figure 5).

Skilled nursing facility and hospital care accounted for more than three-quarters of the average difference in Medicare spending between people who disenrolled from Medicare Advantage and those continuously covered by traditional Medicare

Skilled nursing facility services accounted for the largest share (34%, $877) of the average difference in per person spending between people who disenrolled from Medicare Advantage and those continuously covered by traditional Medicare, followed by outpatient hospital services (23%, $596) and inpatient hospital services (20%, $505) (Figure 6).

For certain groups, the total difference in average per person spending between people who disenrolled from Medicare Advantage and those continuously covered by Medicare Advantage was largely driven by skilled nursing facility services. These included dual-eligible beneficiaries with full Medicaid benefits (62%), beneficiaries ages 80 to 84 (59%) and ages 85 and older (55%), and beneficiaries with pneumonia (85%), Alzheimer’s disease or other dementias (74%), stroke (74%), and heart failure (73%) (Appendix Table 3). By contrast, skilled nursing facility services made up a smaller share of the total difference in average spending among people under age 65 (20%) and those ages 65 to 69 (14%).

Among other groups, inpatient hospital services made up a larger share of the difference in average spending, including among beneficiaries under age 65 with long-term disabilities (48%), as well as among beneficiaries with asthma (47%), glaucoma (33%), and chronic obstructive pulmonary disease (33%). Beneficiaries with certain cancers had among the highest share of the total difference in average spending attributed to outpatient hospital services (34%), a similar share attributed to skilled nursing facility services (30%) and a relatively modest share of the difference attributed to spending on inpatient hospital services (18%).

Consistent with this analysis, a recent report by the majority staff of the Senate Permanent Subcommittee on Investigations found that Medicare Advantage plans are more likely to deny prior authorization requests for coverage of post-acute care, such as skilled nursing facility stays, than for other types of services.

This analysis uses data from the 20% Medicare Master Beneficiary Summary File (MBSF) and Medicare claims files to compare Medicare spending (across Parts A and B) for beneficiaries who were previously enrolled in Medicare Advantage (Disenrolled from Medicare Advantage) to beneficiaries who have been continuously covered by traditional Medicare (Always Traditional Medicare). The Disenrolled from Medicare Advantage cohort includes people who were enrolled in Medicare Advantage in 2021 and in traditional Medicare in 2022. The Always Traditional Medicare cohort of beneficiaries were enrolled in traditional Medicare in both 2021 and 2022.

To be included in either cohort, beneficiaries had to have 12 months of coverage under Medicare Part A and Part B in 2021, as well as coverage in Parts A and B in all months in 2022 they were enrolled in Medicare (i.e., not deceased). The analysis includes all 50 states and DC. People with ESRD are excluded because 2021 was the first year people with ESRD were broadly eligible to enroll in a Medicare Advantage plan. For the Disenrolled from Medicare Advantage cohort, the analysis excludes people who were enrolled in a cost plan, Medicare Medicaid plan, or PACE plan in 2021.

Compared to the Always Traditional Medicare cohort, a somewhat larger share of the Disenrolled from Medicare Advantage cohort were ages 65 to 69 (24% vs. 17%), Black (10% vs. 7%) or Hispanic (7% vs. 5%), or dually eligible for Medicare and full Medicaid benefits (16% vs. 12%). There were also differences in the share of beneficiaries with certain health conditions (Appendix Table 1). To account for differences in age, dual eligibility, and health status, the risk score for each person was calculated using the CMS-HCC Risk Adjustment model based on diagnoses present in 2022. Note that the risk model is used to adjust payments to Medicare Advantage plans and does not account for race. Thus our approach also does not control for race and ethnicity.

Compared to all people enrolled in Medicare Advantage in 2021, those who disenrolled were more likely to have been covered by traditional Medicare in 2020 than those who stayed enrolled in Medicare Advantage. Specifically, among people who disenrolled from Medicare Advantage, 31% were covered by traditional Medicare in 2020; among people who stayed in Medicare Advantage, 11% were in traditional Medicare in 2020. These differences may be driven by the ability for people to return to the same Medigap policy within 12-months after switching to Medicare Advantage for the first time (note, Medicare beneficiaries are limited to a single “trial period”), relieving concerns about Medigap underwriting or cost sharing without a supplemental policy for some subset of people who disenrolled. We are unable to determine what share of the people who disenrolled from Medicare Advantage were in their “trial period” because it was the first time they had tried Medicare Advantage.

Our approach to analyzing spending follows the approach used by MedPAC in calculating average spending for people who switch from traditional Medicare to Medicare Advantage compared to those who remain in traditional Medicare. First, all Medicare payments, beneficiary liability, and other primary payer payments for all Part A and Part B services were summed for each person in the sample for Calendar Year 2022. Next, each person’s total spending is divided by their risk score (calculated using the CMS-HCC Risk Adjustment model and 2022 diagnoses) to derive risk-standardized spending, which allows for comparisons on an apple-to-apple basis for people with differences in health risk (such as differences in diagnosed health conditions). Within each county, the risk-standardized spending for each cohort is then averaged. To estimate spending given the health risk of the population of people who disenrolled from Medicare Advantage, the risk-standardized spending is then multiplied by the average risk score of people who disenrolled from Medicare Advantage. The national average spending for each cohort is then calculated as a weighted average of each county spending, using the number of people who disenrolled from Medicare Advantage as the weight. Counties in which no beneficiaries disenrolled from Medicare Advantage are excluded from the analysis. For each subgroup analysis a similar approach is followed, limiting the sample to people with the specific characteristic.

The Medicare Chronic Conditions Warehouse definitions for chronic conditions were used as a basis for identifying people with specific chronic conditions. To maintain consistency across the cohorts, only the 2022 claims were used. At least 1,000 members of the Disenrolled from Medicare Advantage cohort had to have a chronic condition for it to be included in the list.

Additionally, to test the sensitivity of the analysis, spending was modeled using a regression that controlled for risk score and county. The regression was specified using both a general linear model with a log link and a probit model. The average difference in each case was similar to those presented in this brief.

Overview of Medicare Advantage Payments

Medicare pays Medicare Advantage plans, in part, based on county-level spending for similar people in traditional Medicare, though payments may be higher or lower depending on a range of factors, such as a plan’s quality star rating, the county in which it operates, and the amount requested annually by the plan (referred to as a plan’s “bid”).

Plans that bid above traditional Medicare spending must charge enrollees an additional premium to make up the difference in cost. A growing number of plans choose to bid below traditional Medicare spending, which allows them to recoup a portion of the savings as a “rebate.” Rebates must be put towards certain plan features, such as lower cost-sharing, reductions to enrollees’ Part B or Part D premiums, or extra benefits (such as dental, vision, and hearing) not included in traditional Medicare. Payments are further adjusted to reflect the health status of enrollees, as well as certain other characteristics, such as age, sex, and Medicaid enrollment. Plans whose enrollees are expected to incur larger health costs receive larger payments (a process referred to as “risk adjustment”).

The Medicare Payment Advisory Commission estimates that payment to Medicare Advantage insurers is 122% of Medicare spending for similar beneficiaries covered by traditional Medicare. The higher payments are driven by favorable selection into Medicare Advantage and more intense coding of diagnoses among these plans. Those higher payments allow Medicare Advantage insurers to offer additional benefits and lower out-of-pocket spending, but place pressure on the hospital insurance trust fund and raise Medicare Part B premiums for all beneficiaries, including those in traditional Medicare.