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Medicare Payouts and Plan Preferences by State – 2025 Study

Byline profile imageWritten by Jaclyn DeJohn, CFP®
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Over 61 million Americans receive Medicare benefits to help pay for their healthcare in retirement, a figure up 30% in less than a decade. A low standard monthly premium affords people 65 and older access to care through Part A and Part B coverage, with the option to opt for semi-privatized Part C coverage, also known as Medicare Advantage; Part D for prescription coverage; or Medigap supplemental insurance to cover additional out-of-pocket expenses. In 2023, the Medicare program paid out over $323 billion on behalf of retired Americans just through Part A and Part B coverage alone. 

Each year during the annual Medicare enrollment period – October 15th through December 7th – beneficiaries have the option to change their coverage selections. As retirement progresses, Americans’ risk tolerance, budget and health circumstances may change, sometimes prompting a refreshed healthcare strategy. To this end, health and financial variations at the state level can give seniors a statistical perspective to help guide their coverage decisions.

With this in mind, SmartAsset ranked 50 states based on enrollment plan preferences, total and per capita Medicare payouts, health risk scores for local seniors, and the prevalence of inpatient and emergency room use by those 65 and older.

Key Findings

  • Nearly two-thirds of seniors opt for Medicare Advantage plans in Minnesota. Minnesota seniors have the highest preference for Medicare Advantage (Part C) coverage, with 64.8% of beneficiaries opting for this route over Medicare’s original coverage (Parts A and B). Michigan (63.3%) and Rhode Island (62.9%) seniors follow closely behind.
  • Seniors in these states have a strong preference for basic enrollment. Nearly all seniors in Alaska stick with Medicare Parts A and B (“original” Medicare), with only 2.8% choosing a Medicare Advantage plan (Part C). The average annual payout for this vast majority of users stands at $10,955. Wyoming beneficiaries rank second in their preference for original Medicare, which pays out an average of $10,638 per year each, with only a 13.2% opt-in rate for Medicare Advantage.
  • Florida seniors have the highest health risks. Medicare beneficiaries in Florida have the highest health risks, with a 9% higher risk rate than nationwide average, as measured by typical healthcare costs. Health risks are also particularly high in the New York tri-state area, with New York (+6% risk), Connecticut (+6% risk), and New Jersey (+3% risk) following behind Florida in this metric. 
  • Seniors have the lowest health risks in these states. Wyoming seniors have the lowest risks nationwide with a 23% lower risk of healthcare complications, based on adjusted healthcare costs. Seniors in Alaska (-22%), Montana (-19%), Vermont (-18%), and New Mexico (-16%) also rank among the lowest-risk states.
  • Medicare pays out the most for seniors in New York and California. New York seniors have the highest Medicare payouts at an average of $15,581 per year. California follows at $14,992, compared to the nationwide average of $12,657. Meanwhile, the lowest payouts per beneficiary are in Montana ($9,528), Hawaii ($9,775) and New Mexico ($10,008).
  • Seniors in Connecticut visit the emergency room the most. 32.1% of Medicare beneficiaries in Connecticut used the emergency room at least once in 2023. For inpatient services, Alabama beneficiaries had the highest rate of at least one incident at 16.3%, followed closely by Florida and Massachusetts both at 16.0%.

Annual Medicare Payout per Beneficiary: Top 10 States

States are ranked based on the average annual dollar amount paid out on behalf of each senior Medicare beneficiary enrolled in fee-for-service coverage (Part A and Part B).

  1. New York: $15,581
  2. California: $14,992
  3. Connecticut: $14,757
  4. New Jersey: $14,662
  5. Massachusetts: $13,883
  6. Maryland: $13,870
  7. Florida: $13,691
  8. Texas: $13,392
  9. Nevada: $13,229
  10. Oklahoma: $13,020

Lowest Annual Medicare Payout per Beneficiary

  1. Montana: $9,528
  2. Hawaii: $9,775
  3. New Mexico: $10,008
  4. Oregon: $10,100
  5. Idaho: $10,186
  6. Washington: $10,460
  7. Maine: $10,520
  8. Wyoming: $10,638
  9. Iowa: $10,684
  10. Wisconsin: $10,744

Medicare Advantage (Part C) Preference: Top 10 States

States are ranked based on the percentage of senior Medicare beneficiaries who opt for Part C coverage on top of Part A and B coverage.

  1. Minnesota: 64.82%
  2. Michigan: 63.33%
  3. Rhode Island: 62.87%
  4. Hawaii: 60.63%
  5. Maine: 60.62%
  6. Connecticut: 60.46%
  7. Alabama: 60.28%
  8. Wisconsin: 59.07%
  9. Oregon: 58.46%
  10. Florida: 57.32%

Lowest Medicare Advantage Preference

  1. Alaska: 2.76%
  2. Wyoming: 13.20%
  3. Maryland: 24.45%
  4. Montana: 28.90%
  5. Delaware: 30.41%
  6. Kansas: 32.00%
  7. Nebraska: 32.25%
  8. North Dakota: 33.64%
  9. Vermont: 33.96%
  10. Iowa: 35.15%

Most Inpatient Benefits Use From Seniors: Top 10 States

States are ranked based on the percentage of senior Medicare beneficiaries who use inpatient services at least once during a year.

  1. Alabama: 16.25%
  2. Florida: 15.98%
  3. Massachusetts: 15.98%
  4. West Virginia: 15.88%
  5. Connecticut: 15.73%
  6. New York: 15.64%
  7. Illinois: 15.44%
  8. Kentucky: 15.35%
  9. Michigan: 15.29%
  10. Oklahoma: 15.29%

Most Emergency Room Visits From Seniors: Top 10 States 

States are ranked based on the percentage of senior Medicare beneficiaries who use emergency room services at least once during a year.

  1. Connecticut: 32.09%
  2. West Virginia: 31.77%
  3. Maine: 31.35%
  4. Oklahoma: 30.74%
  5. Kentucky: 30.72%
  6. Florida: 30.34%
  7. Ohio: 30.20%
  8. Indiana: 30.19%
  9. Wisconsin: 30.14%
  10. Alabama: 30.11%

Data and Methodology

Data for this SmartAsset study comes from the Centers for Medicare & Medicaid Servicess for 2023, specifically for Medicare beneficiaries aged 65 and older.

Data reported includes:

  • Payout per beneficiary: Actual per capita fee-for-service payment. The average payout for fee-for-service (Part A and Part B coverage).
  • All senior Medicare beneficiaries: Total count of Medicare beneficiaries, including all with Part A and/or Part B coverage or Medicare Advantage (Part C) participation.
  • Medicare Advantage enrollees: Percentage of beneficiaries enrolled in Medicare Advantage (Part C) throughout the year.
  • Senior health risk: Average Hierarchical Condition Category (HCC) Score. A score of 1 represents the average healthcare cost needs.
  • Beneficiaries using inpatient services in a given year: Percent of fee-for-service beneficiaries (Part A and B beneficiaries) with ≥ 1 inpatient stay.
  • Beneficiaries using the ER in a given year: Percent of fee-for-service beneficiaries (Part A and B beneficiaries) with ≥ 1 emergency room visit in the year.
  • Percent using outpatient services: Beneficiaries using outpatient services in a given year.

Questions about this study? Contact us at press@smartasset.com

Photo credit: ©iStock.com/Richard Stephen