Racial and Ethnic Health Inequities and Medicare
Education, Poverty, and Wealth
Black and Hispanic Medicare Beneficiaries Have Lower Educational Attainment Levels Compared to White Beneficiaries
Educational attainment, one of the key social determinants of health, varies by race and ethnicity, with Black and Hispanic beneficiaries having fewer years of education compared to White beneficiaries.
More than one quarter of Black (27%) Medicare beneficiaries and nearly one half (45%) of Hispanic beneficiaries have less than a high school education, compared to 10% of White beneficiaries (Figure 7). Conversely, a much smaller share of Black (12%) and Hispanic (13%) beneficiaries than White beneficiaries (32%) have a college degree or higher.
Nearly Half of Older Hispanic and Black Adults Have Family Incomes Below 200% of the Poverty Threshold—Nearly Double the Rate Among Older White Adults
Among people ages 65 and older, Black and Hispanic adults are more likely than older White adults to have family income below poverty, based on both the official poverty measure and the Supplemental Poverty Measure (SPM).
Based on the official poverty measure, nearly half of older Black and Hispanic adults (51% and 49%, respectively) have family incomes below 200% of poverty, compared to just over one quarter (29%) of older White adults (Figure 8).
The share of Black and Hispanic adults with family income below poverty is higher based on the SPM than under the official poverty measure. The SPM differs from the official poverty measure in that it takes into account several additional financial resources, including in-kind government benefits (e.g., food stamps, housing subsidies), tax credits, out-of-pocket medical expenses, work expenses, homeownership, and geographic variation in housing costs. The SPM also deducts medical out-of-pocket expenses from financial resources, which is an especially important factor in calculating income for older adults. Based on the SPM, 63% of older Black adults and 68% of older Hispanic adults have incomes below 200% of poverty, compared to 39% of older White adults.
Median Per Capita Income, Savings, and Home Equity are Higher for White Beneficiaries Than for Black or Hispanic Beneficiaries
In 2019, half of all Medicare beneficiaries had incomes below $29,655 per person, savings below $73,819 per person, and home equity below $75,346 per person (Figure 9).
Median per capita income among White beneficiaries ($33,718) was double that of Hispanic beneficiaries ($15,611) and 1.5 times higher than median per capita income among Black beneficiaries ($23,050).
The wealth gap, based on median per capita home equity and savings, was notably wider. Median per capita savings among White beneficiaries ($117,803) was more than eight times higher than savings among Black beneficiaries ($14,523) and about twelve times higher than savings among Hispanic beneficiaries ($9,634). Median per capita home equity was more than five times higher among White beneficiaries ($95,001) than among Black beneficiaries ($18,454) or Hispanic beneficiaries ($16,494). Lower savings and home equity among people of color on Medicare than among White Medicare beneficiaries, in part, reflects fewer opportunities among Black and Hispanic adults to accumulate wealth and transfer wealth from one generation to the next.1,2,3
A Wide Racial and Ethnic Disparity in Per Capita Savings Persists Even Among People on Medicare With a College Degree
While educational attainment has been considered by some as a pathway to improving wealth attainment, large racial and ethnic wealth gaps among Medicare beneficiaries persist even among beneficiaries who have attained the highest level of formal education.
Among beneficiaries with a college degree or higher, median per capita savings among White beneficiaries ($328,348) were four times higher than among Black beneficiaries ($82,050) and almost five times higher than among Hispanic beneficiaries ($67,777) (Figure 10). The persistence of the racial wealth gap even at the highest education level reinforces the role of other factors, including structural racism, in generating inequities in Medicare beneficiaries’ financial security.