This Is How Much Retirees Really Spend on Health Care

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Smiling doctor comforting a smiling and happy senior patient
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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 $7,540 a year on health care, according to federal data on consumer spending for the latest calendar year available, which is 2022.

That translates to about 13% of the total spent each year by senior households ($57,818) and makes health care the third-biggest spending category among those households. Only housing and transportation accounted for a bigger share of seniors’ spending in 2022. (Housing costs the most by far, as we detail in “Here’s How Much Retiree Households Spend in a Year.”)

By comparison, all U.S. households spend an average of $5,850 a year on health care, which translates to about 8% of spending across all households ($72,967).

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

Health insurance

Home health aide
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Average spending for a U.S. household led by someone age 65 or older: $5,277 per year

Average spending across all U.S. households: $3,843 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 $5,277 — around $440 a month — on insurance. That’s about 9.1% 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

Older woman with doctor
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Average spending for a U.S. household led by someone age 65 or older: $1,142 per year

Average spending across all U.S. households: $1,184 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

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Average spending for a U.S. household led by someone age 65 or older: $843 per year

Average spending across all U.S. households: $615 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:

Medical supplies

Nursing Home
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Average spending by a U.S. household led by someone age 65 or older: $278 per year

Average spending across all U.S. households: $209 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

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