Medicare Your Coverage Options

People with Medicare spend significantly more on health care than working people

Written by Diane Archer

Many people do not realize that health care costs are almost 14% of household income for people with Medicare. Medicare covers a wide range of services, including hospital care, medical services, prescription drugs, durable medical equipment, physical therapy and many screenings and preventive services. But, people with Medicare spend significantly more on health care than working people.

Households of people with Medicare spent an average of $4, 722 out of pocket on health care in 2012, according to the Kaiser Family Foundation, Of that money, they spent $2,000 on premiums and the rest on services, with care in a long-term care facility representing the largest share of health care service expenses, 18 percent or $494. Other out-of-pocket costs include an average of $873 for medical services, $613 for prescription drugs, and $149 for medical supplies.

Overall household spending for older adults was $33,993 in 2012. They spent only slightly more on food ($5,189)  and transportation ($5,087) than on health care.

In sharp contrast, working people spent only a bit more than five percent of their household income (5.2 percent) on health care. In 2012, the average working household expenditures were $53,000. And, of that, households spent about $2,772 on health care.

Older adults need more health care than working people, and Medicare does not cover nursing home care and only covers limited long-term supports and services. Older adults also have lower average household incomes than working households.

Here’s more on health care spending from Just Care:


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