Democrats are casting the shutdown showdown as a battle over health care costs, tapping into widespread anxiety over the cost of health care, especially among those enrolled in Medicare. For them, it’s politics. But for millions of American seniors, the worry is real — not just a convenient talking point.

Recent polling shows 58% of Medicare recipients 65 and over are concerned about future health care costs, and half are worried a major health situation could result in either debt or bankruptcy.

If left unchanged, Medicare will be unable to pay full benefits by 2036.

While medical debt is a growing concern among Medicare recipients, the staggering size of the federal debt — largely driven by Medicare spending — is a ticking time bomb Congress can no longer ignore. As one of the largest federal spending programs, Medicare consisted of a jarring $874 billion out of the $6.75 trillion federal budget (about 13 cents of every dollar spent in FY2024).

While Medicare receives some funding from premiums paid by enrollees, the single largest source of revenue comes from the federal government's general fund. If left unchanged, Medicare will be unable to pay full benefits by 2036.

Medicare Advantage toes the line

Fortunately, policy solutions exist that can help both seniors and taxpayers.

Medicare Advantage merges public financing with private delivery under accountability. The government pays a fixed amount per enrollee to private plans, calibrated by benchmarks and quality measures. Plans that achieve higher star ratings — which were just released for 2026 by the Centers for Medicare and Medicaid Services earlier this month — receive bonus payments. Meanwhile, poor performers lose ground.

This structure introduces incentives for efficiency and quality that are lacking in traditional Medicare. Yet, successive years of cuts to how Medicare Advantage plans are reimbursed have forced several major insurers to announce they’re withdrawing from certain Medicare Advantage markets next year.

Companies like UnitedHealth, Humana, Aetna, as well as regional plans such as UCare (serving Minnesota and parts of Wisconsin) and Blue Cross Blue Shield of Vermont, are withdrawing from select Medicare Advantage counties across the country, citing rising costs. Seniors are using more medical services than expected, driving up claims, while federal reimbursement rates are being cut. Added regulatory and administrative burdens (such as expanded reporting requirements and prior authorization rules) further limit insurers. Together, these pressures make participation unsustainable in some markets.

If unchanged, more insurers will leave Medicare Advantage, and options for seniors will continue to shrink. Meanwhile, Medicare costs are growing much faster than private health care spending.

In 2023, traditional Medicare spent $15,689 per enrollee, more than double the private sector amount. This is a result of the traditional fee-for-service model, which pays providers per treatment instead of per patient, rewarding volume over outcomes, encouraging unnecessary care, and driving up costs.

Conversely, Medicare Advantage’s structure encourages prevention and coordination. To attract enrollees, Medicare Advantage offers supplemental benefits such as vision, dental, hearing, wellness programs, transportation, and over‑the‑counter benefits. Many Medicare Advantage plans now include these extras at little or no additional cost. That flexibility helps tailor benefits to beneficiary needs.

Better treatment, lower costs

When allowed to work, Medicare Advantage delivers higher satisfaction, lower costs, and greater access to coverage than traditional Medicare. One Harvard study found that seniors enrolled in Medicare Advantage had better health outcomes than seniors on traditional Medicare. A National Institutes of Health review of hundreds of studies found that Medicare Advantage provided significantly better quality of care and health outcomes than traditional Medicare by a factor of four to one. Another NIH study found that across 48 studies, Medicare Advantage enrollees received more preventative care and had fewer hospitalizations and emergency visits, shorter stays, and lower total spending.

The financial and quality advantages are clear. One study comparing expected out‑of‑pocket costs in Medicare Advantage versus traditional Medicare found that from 2014 to 2019, projected costs were 18% to 24% lower under Medicare Advantage. For seniors on fixed incomes — that is significant.

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Seniors get it. This year, the majority of Medicare beneficiaries are enrolled in Medicare Advantage plans. Over the last two decades, enrollment in Medicare Advantage has skyrocketed. Unsurprisingly, polling shows 93% of Medicare Advantage enrollees were satisfied or very satisfied with their coverage, and 94% would recommend it to their family and friends. The Congressional Budget Office now projects that by 2034, Medicare Advantage could account for nearly two-thirds of all Medicare beneficiaries.

The model for the future

Medicare Advantage provides the model for quality, affordable health care for seniors that aligns with what they prefer. Reducing regulatory burdens and barriers within the insurance market will provide Medicare Advantage plans greater flexibility and even entice those insurers leaving the Medicare Advantage market to reconsider.

Medicare cannot continue as purely fee‑for‑service without reform — neither for the medical and financial health of Americans, nor for the sake of the federal budget. The current fiscal challenges plaguing the federal budget demand models that can bend the cost curve while improving quality. Medicare Advantage is not a cure-all, but it is among the most promising tools in the toolbox.