Here’s how much older people actually spend on healthcare


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Many major expenses shrink once you retire, but health care is not one of them.

US households led by someone age 65 or older spend an average of $6,668 a year on health care, according to the latest Federal Bureau of Labor Statistics data on consumer spending for 2020.

This translates to about 14% of all senior household spending ($47,579) and makes health care the second largest spending category among those households. Only housing accounted for a larger share of seniors’ spending in 2020, as we detail in “Here’s How Much Retirement Families Spend in a Year.”

in comparison, everyone American households spend an average of $5,177 annually on health care, which translates to about 8.4% of all household spending ($61,334).

Here’s a detailed look at how medical spending for elderly families has collapsed.

health insurance

home health aide
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The average expenditure of an American household led by someone 65 years of age or older: $4,854 per year

Average spending across all American households: $3,667 per year

Insurance is easily the largest health care expense for families of any age, but the most expensive for elderly families. On average, they spend $4,854 – about $400 per month – on insurance. This represents about 10% of their total spending.

As defined by the Bureau of Labor Statistics, health insurance expenses include different types of insurance — including traditional fee-for-service health plans, HMOs, and supplemental health care plans, for example.

medical services

Elderly woman with a doctor
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The average expenditure of an American household led by someone 65 years of age or older: $835 per year

Average spending across all American households: $864 per year

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

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

drugs

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The average expenditure of an American household led by someone 65 years of age or older: $727 per year

Average spending across all American households: $476 per year

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

There are many ways anyone can cut drug costs — including some that you may not even realize exist. Money Talks has covered the topic extensively. See for example:

medical supplies

the House
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The average spending by a US household led by someone 65 years of age or older: $251 per year

Average spending across all American households: $170 per year

This type of spending covers:

  • A variety of supplies, including bandages, antiseptics, dressings, first aid kits, syringes, ice packs, thermometers, sunlamps, and heating pads
  • Medical devices – such as clamps, canes, crutches, walkers, eyeglasses and hearing aids
  • Medical equipment rental and repair

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