Medicare Falls Short: U.S. Seniors Struggle More Than Peers Abroad to Afford Care

A new study reveals that older Americans—whether on traditional Medicare or Medicare Advantage—face higher out-of-pocket costs and more barriers to care than seniors in other wealthy nations.

Since its beginning in 1965, Medicare has been a bright star in American social progress. But it was not set up to pay for all medical expenses of seniors. They can buy supplemental insurance to cover the costs that Medicare doesn’t, and in recent years they have been able to choose an alternative, marketed as Medicare Advantage, that offer some protections.

The question explored here is not which option is best, but how well U.S. seniors fare medically and financially when compared to their peers in other wealthy countries.  A recent study from The Commonwealth Fund, a New York philanthropic organization with a long history studying Medicare, suggests the answer is: not very well. 

The Fund found that American seniors have a harder time affording their health care than seniors in most of the other countries they studied – Australia, Canada, France, Germany, the Netherlands, New Zealand, Sweden, Switzerland and the United Kingdom.  

“The study shows that most people on Medicare are getting the care they need, but an important share is not, and they are postponing or skipping care altogether,” says Gretchen Jacobson, one of the study’s authors.  “Overall, 8% of people over 65 needed treatment but did not get it because of costs.”  

The high out-of-pocket costs Medicare requires – the 20% of the bill they must pay if they don’t have a supplemental policy – is a substantial impediment to care. The Fund found almost one in four older adults in the U.S. spent at least $2,000 out of pocket on health care in the past year.  

Jacobson points out it is not just the cost sharing and the premiums that cause U.S. adults 65 and older who have Medicare coverage to spend more than their peers in the other countries studied. “There are many services older adults need, like dental and vision care, that are not covered,” Jacobson said. 

When it came to other aspects of care Medicare beneficiaries received, the U.S. didn’t stack up well either. In the Netherlands only about 1% of respondents said they did not see a doctor because of costs when they had a medical problem.  In the U.S., 9% who were in traditional Medicare reported they didn’t visit a doctor for that reason. The Fund found that 12% of older adults in the U.S. avoided filling prescriptions or skipping doses because of costs. In the nine other countries surveyed, researchers found 6% or fewer adults said they skipped a prescription or dose of medicine prescribed for them. In the U.K. only 1% of respondents said they skipped medicine; 2% of those in the Netherlands and New Zealand said they did. A recent KFF study found that 28% of Americans say it is somewhat or very difficult to afford the costs of their prescription drugs. 

The U.S. didn’t perform any better when it came to dental care. Traditional Medicare offers coverage only when connected to services that are medically necessary and usually tied to a surgery or an emergency. In the Netherlands only 4% and in Germany 5% of the people surveyed said they skipped dental care because of costs. In the U.S., 20% of respondents reported they did not receive dental care because of costs. Of those who skipped dental care, 22% were in traditional Medicare and 19% in Advantage plans.

The researchers did not find significant differences in measures of affordability of care between traditional and Medicare Advantage plans, even though Medicare Advantage plans limit beneficiaries’ out-of-pocket expenses and may offer lower cost sharing and some dental care. The studies found beneficiaries in both types of plans experienced cost barriers that seniors in other countries may not encounter in their systems, all of which provide universal coverage.  “The fundamental thing is that having coverage doesn’t mean someone can always access or afford the care they need,” Jacobson said.  

“People who have Medicare and are not able to afford the care they need means the program is falling short of its original goal,” Jacobson says. 

A major takeaway from the study is that beneficiaries with both types of coverage – traditional Medicare and Medicare Advantage – experience similar barriers to care, a point worth remembering when open enrollment comes around in the fall.

Trudy Lieberman, a past president of the Association of Health Care Journalists, has had a long career in journalism, specializing in health care in recent years. She has written for many publications including Consumer Reports, Columbia Journalism Review, The Nation, Harper's Magazine, and the Center for Health Journalism. She has won many awards for her work including two National Magazine Awards, several National Press Club Awards, and a James Beard Award.