How Much Retirees Actually Spend on Health Care in the U.S.

Many major expenses only shrink once you retire, but health care is hardly one of them.

U.S. households led by someone who is 65 or older spend an average of $7,030 a year on health care, according to the federal Bureau of Labor Statistics’ latest data on consumer spending, which is for 2021.

That translates to about 13% of the total spent each year by senior households ($52,141) and makes health care the second-biggest spending category among those households. Only housing accounted for a bigger share of seniors’ spending in 2021, as we detail in “Here’s How Much Retiree Households Spend in a Year.”

By comparison, all U.S. households spend an average of $5,452 a year on health care, which translates to about 8% of spending across all households ($66,928).

Following is a detailed look at how senior households’ medical spending breaks down.

Health insurance

Average spending for a U.S. household led by someone age 65 or older: $4,974 per year

Average spending across all U.S. households: $3,704 per year

Insurance is easily the largest health care expenditure for households of any age, but it’s highest for senior households. On average, they spend $4,974 — around $415 a month — on insurance. That’s about 10% of their total spending.

As defined by the Bureau of Labor Statistics, the expense of health insurance includes various types of insurance — including traditional fee-for-service health plans, HMOs and supplemental Medicare plans, for example.

Medical services

Average spending for a U.S. household led by someone age 65 or older: $1,077 per year

Average spending across all U.S. households: $1,070 per year

As defined by the Bureau of Labor Statistics, this type of health care expense includes a wide variety of care, such as:

• Hospital room and services
• Services from physicians and other professionals
• Eye and dental care
• Lab tests and X-rays
• Medical care in a retirement community
• Care in a convalescent or nursing home

Drugs

Average spending for a U.S. household led by someone age 65 or older: $726 per year

Average spending across all U.S. households: $498 per year

Drug spending includes spending on prescription and nonprescription medications as well as vitamins.

There are numerous ways anyone can cut their drug costs — including some ways you might not realize exist. Money Talks News has covered the topic extensively. See for example:

• “5 Ways I Slashed My Drug Costs up to 50%“
• “4 Pharmacy Chains That Offer Free Medications“

Medical supplies

Average spending by a U.S. household led by someone age 65 or older: $253 per year

Average spending across all U.S. households: $181 per year

This type of spending covers:

• A variety of supplies, including dressings, antiseptics, bandages, first aid kits, syringes, ice bags, thermometers, sun lamps and heating pads
• Medical appliances — such as braces, canes, crutches, walkers, eyeglasses and hearing aids
• Rental and repair of medical equipment