If you have Medicare, you might just be spending as much on health care as you are on food: health care is typically 13.9% of household spending.As you age, watch out. Your healthcare costs can eat up a huge portion of your total household spending.
Healthcare spending often represents a large share of overall household spending, particularly for older adults with Medicare, living on fixed incomes, who need significant amounts of care. For sure, you spend a larger portion of your income on health care as you age and as your income decreases. And, of course, the more health care you need, especially if you need long-term care, the more likely a greater portion of your income goes to health care.
Household spending on health care is significantly higher on average for people with Medicare. As of 2012, the typical Medicare household has a lower income, $33,993, and higher health care costs than younger household’s income, $53,000. In 2012 Medicare households spent 13.9% of their total household spending on healthcare costs, $4722, whereas non-Medicare households spent closer to 5%, $2722.
So, what do people spend their health care dollars on? Mostly they are paying a lot for health insurance, such as premiums and coinsurance payments. Premiums alone typically account for two-thirds of total spending for people with Medicare, a yearly average of $3088. Other out-of-pocket costs include an average of $873 for medical services, $613 for prescription drugs, and $149 for medical supplies. The share of healthcare costs mirrors the cost of food and transportation for Medicare households.
Click here to read more from Kaiser Family Foundation.