Here Are the Medicare Out-of-Pocket Expenses That Cost Beneficiaries the Most

Do you know what your Medicare clients likely spend the most money on out of pocket? Do your clients know what out-of-pocket costs they can expect with Medicare? The stats are in!

Please note that all out-of-pocket spending statistics in this post come from KFF’s “Health Costs Consume a Large Portion of Income for Millions of People with Medicare” report, published on August 21, 2025. While the data in the report is from 2022, it’s the most current comprehensive study on this subject.

What Contributes to Medicare Out-of-Pocket Spending?

Here are the most common Medicare out-of-pocket expenses and the factors that may influence them.

Health Care Costs

In 2022, traditional Medicare beneficiaries spent an average of $6,330 out-of-pocket on health care costs. These service costs accounted for 39 percent of beneficiaries’ annual social security income.

Factors That May Affect Your Clients’ Bills

Beneficiaries’ Medicare out-of-pocket spending varied considerably based on several factors, including their age, gender, health status, and if they have supplemental coverage.

• Age — Beneficiaries age 85 or older spent almost double out-of-pocket of what those between 65 to 74 years old spent.
• Gender — Female Medicare beneficiaries spent more out of pocket than male Medicare beneficiaries.
• Health — Those in poorer health (with multiple chronic conditions, who were an inpatient in a hospital, or who lived at a long-term care facility) spent more out of pocket than typical Medicare beneficiaries.
• Supplemental Coverage — Individuals who do not have supplemental coverage typically incurred higher out-of-pocket costs than those who had some type of extra coverage.

Ways to Limit Medicare Out-of-Pocket Expenses

Helping your clients keep their Medicare out-of-pocket costs low can really help you earn their trust and loyalty. Try using these strategies to limit your clients’ expenses.

Medicare Premiums & Deductibles

Start by making sure your clients are comfortable with the premiums and deductibles they’re paying.

If your clients go with traditional Medicare, their premiums and deductibles for Medicare Parts A and B are pretty much set in stone; however, you can help them secure enrollment in a Part D plan with a low premium and deductible. Prescription drug coverage is sold by private insurers, so these plans’ premiums and deductibles differ from carrier to carrier and plan to plan.

Need more help? We’ve compiled all the info you need to know about selling PDPs in our free resource, The Complete Guide on How to Sell Prescription Drug Plans. Request your free copy!

What if your client wants Medicare Advantage coverage? There are MA plans with premiums, as well as plans with $0 premiums.

Premiums won’t be an out-of-pocket expense with low-to-no-premium MA plans, but your client will still be subject to cost-sharing. Deductibles also vary from carrier to carrier and plan to plan, so it’s important for you to research these as well.

It could be a good idea to lead your clients toward using PlanEnroll, where they can compare costs and coverage options in their area.

In-Network vs. Out-of-Network

Another way you can help your clients minimize their Medicare out-of-pocket spending is by ensuring they’re in plans that have their desired doctors, hospitals, pharmacies, and durable medical equipment providers in network versus out of network. Plan members tend to pay less out-of-pocket when they visit in-network providers and pharmacies versus out-of-network ones.

Plan members tend to pay less out-of-pocket when they visit in-network providers and pharmacies versus out-of-network ones.

Prescription Drug Formularies

Every prescription drug plan, and Medicare Advantage Prescription Drug plan, has to have a formulary. A formulary tells everyone what drugs the plan covers and how much they will cost a plan member.

Remember to ask your clients about the prescriptions they take and do your research to see which plan makes them the most affordable and the most sense.

Supplemental Coverage

Sometimes you have to spend a little more up front to spend a little less later. There are several types of supplemental plans that can help limit your clients’ out-of-pocket expenses.

For example, long-term care insurance can really help to address the number one cause of service-related Medicare out-of-pocket spending. Dental and vision or dental, vision, and hearing plans can also cut back on your Medicare clients’ dental (and vision and hearing) out-of-pocket expenses.

If your client has traditional Medicare, a Medicare Supplement should be considered as well. These plans help cover the Part A and/or Part B deductible, Part A and/or coinsurances and copayments, and more!

Research shows that many people enrolled in traditional Medicare spend a significant share of their income on health care.

While that may not sound overwhelming at first, even setting aside a portion of a fixed budget for medical costs can be a real strain, especially for retirees. Over time, small expenses add up quickly.

That’s why informed guidance is one of the bests things you can give your clients. Register with Ritter and we will make it easy to navigate coverage options, compare plans, and help your clients make confident, cost-effective decisions.