Older Americans are generally paying more out of pocket for healthcare, though the extent varies based on factors like age, health status, insurance coverage, and retirement timing. While some recent data show a slight dip in projected healthcare savings needed for retirees, overall costs remain high and continue to rise for many seniors.
Healthcare expenses for older adults are substantial and growing. For example, a healthy 65-year-old couple today needs to save around $388,000 to cover healthcare costs throughout retirement, including premiums, out-of-pocket expenses, prescription drugs, and services like dental and vision. This figure has fluctuated slightly but remains near record highs, reflecting ongoing increases in Medicare Part B premiums and out-of-pocket costs. Women tend to face higher healthcare expenses than men, and those who retire earlier—such as at age 60 instead of 65—can expect to pay significantly more, sometimes up to 90% more, because they must cover costs before Medicare eligibility begins.
The rising costs are driven by multiple factors. The aging U.S. population is growing rapidly, with over 61 million Americans aged 65 and older as of 2024, projected to reach more than 20% of the population by 2030. Older adults are more likely to have chronic conditions like diabetes, heart disease, and dementia, which require ongoing medical care, frequent doctor visits, medications, and sometimes long-term care services such as nursing homes or in-home assistance. These needs push up both insurance premiums and out-of-pocket spending.
Prescription drug costs remain a major contributor to out-of-pocket expenses, although recent policy changes like the Inflation Reduction Act have allowed Medicare to negotiate some drug prices, slightly easing the burden. Still, inflation and healthcare price increases continue to outpace general inflation, putting pressure on hospital operations and patient costs alike.
For those relying on private insurance through marketplaces established by the Affordable Care Act (ACA), the situation is also challenging. Enhanced premium tax credits that helped reduce costs during the pandemic are set to expire, which will cause premiums to rise sharply—potentially by 75% on average next year. This will hit adults aged 50 to 64 particularly hard, as they already pay significantly more for private insurance than younger people. Losing these subsidies means many older adults will face much higher monthly premiums, making healthcare less affordable.
Out-of-pocket costs include not only premiums but also deductibles, copayments, and services not fully covered by Medicare, such as dental, visio
