Average Cost of Health Care by Age
Knowing the average cost of health care as you age can help you plan ahead. Expect to pay more — a lot more — as the need for care rises.

If you can afford the average cost of health care as you age, you'll be halfway to solving one of the thorniest problems in retirement planning. When it comes to bills, health care isn’t cheap. Unfortunately, the older you get, the crankier your body gets. And that means more trips to the doctor, more prescriptions to fill, and more money spent on care.
The average monthly cost of health care exceeds $1,000 by the time you're 60. It’s no surprise, then, that 80% of respondents to an RBC Wealth Management survey said they’re concerned about funding the cost of health care in retirement. And given funding shortfalls for Medicare in the next decade, planning for medical costs will be even more important.
So, what does health care cost at different ages — and stages of life? To find out, we dove into health expenditure data by age provided by Peterson-KFF Health System Tracker and an analysis by SmartFinancial, an online insurance marketplace.

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Average cost of health care rises over time
In the big picture, here’s what the numbers tell us.
If you’re over 55, you can expect to pay more than you would in your 20s, 30s, or 40s. And if you’re 65 or older, expect to pay even more. In fact, a small segment of the population accounts for an oversized share of total health spending each year. That’s the key takeaway from the health spending analysis by Peterson-KFF.
In fact, people aged 55 and over account for over half (55%) of total health spending, despite making up just 31% of the U.S. population. according to KFF’s analysis of the Agency for Healthcare Research and Quality’s 2021 Medical Expenditures Panel Survey (MEPS). “Health spending often increases with age, as we generally have more health conditions and need more care as we grow older,” the study co-authors noted.
Adults who’ve been diagnosed with chronic conditions, such as emphysema, diabetes, heart disease, and high blood pressure, have much higher medical costs. Those with mental health diagnoses like anxiety and depression also pay more out-of-pocket for care.
Typically, younger people are healthier, have fewer chronic health conditions, and, as a result, pay less for health care coverage. Here’s a cost breakdown by age that illustrates how medical bills can rise as people age.
Age | Avg. Monthly Premium |
---|---|
20 | $377.92 |
25 | $390.44 |
30 | $441.39 |
35 | $475.22 |
40 | $497.00 |
45 | $561.56 |
50 | $694.56 |
55 | $867.22 |
60 | $1,055.44 |
64 and older | $1,166.67 |
*Cost for Affordable Care Act (ACA) Marketplace “benchmark” plans in Silver tier coverage, which comes with moderate monthly premiums and moderate out-of-pocket costs.
Source: SmartFinancial
Health care cost components
Age: “Age is one of several factors insurers use when calculating your health insurance premium,” according to Dan Marticio, author of the SmartFinancial health care premium study.
For marketplace insurance plans, health insurers also consider these other factors when calculating premiums, according to SmartFinancial.
Location: Premium prices can vary by state and even by city, based on different costs for medical products, prescription drugs and care.
Tobacco use: Smokers can pay up to 50% more than non-smokers.
Number of insureds: Adding dependents, such as children or a spouse, can increase the cost of health insurance.
Plan category. There are five coverage tiers for Marketplace health care plans, ranging from low-end Bronze to high-end Platinum. There’s also a Catastrophic plan. The Bronze plans charge the lowest monthly premium but have the highest deductibles and out-of-pocket costs. In contrast, Platinum plans charge the highest premiums but cost you the least out-of-pocket.
How to cope with the cost of health care in retirement
No doubt, the high cost of health care in retirement can be daunting. In fact, a 65-year-old who retired in 2024 can expect to spend $165,000 on health care throughout retirement, according to Fidelity Investments’ latest Retiree Health Care Cost Estimate report. “Health care costs are among the most unpredictable expenses, especially when it comes to retirement planning,” said Robert Kennedy, SVP of workplace consulting at Fidelity. The uncertainty surrounding one’s health trajectory, rising premiums and hard-to-predict out-of-pocket costs are big reasons why many people stress over medical care and costs.
But T. Rowe Price research suggests it’s a mistake to view health care expenses in retirement as one giant lump sum amount. Despite these so-called big, scary numbers, nobody pays for health care all at once. It makes more sense to view medical costs as an ongoing budget.
“(Medical expenses) are spread out over many years,” Stuart Ritter, VP, insights director at T. Rowe Price, wrote in a piece aimed at financial advisors titled, “What Your Clients Need to Know About Health Care Costs in Retirement."
“(Our research shows that) health care is far more financially manageable than it’s made out to be,” Ritter said. What makes planning a bit easier is the fact that policy premiums, which account for 73% of health care expenses, are predictable fixed costs that retirees can plan for and pay from monthly income, according to T. Rowe Price. The more unpredictable expenses, which are more challenging to plan for, such as out-of-pocket expenses, account for just 27% of overall medical costs.
What’s more, despite the pervasive fear of so-called health care “shocks,” or large, unexpected costs that arise due to an illness, causing financial ruin, only a small percentage of retirees actually experience such a destructive financial hit. Only 10.9% of retirees experienced an increase in medical costs between $2,000 and $5,000 over a two-year period, according to T. Rowe Price research. And just 2% experienced an increase of $25,000 or more over a 24-month span.
How to plan for your future cost of health care
Like any financial goal, paying for health care costs requires planning. RBC Wealth Management advises younger savers with time on their side to create a long-term investment plan to help cover the costs later in life.
Workers should take advantage of workplace wellness programs, which can help reduce the cost of healthcare as they age. It is also prudent to choose the right health care plan that offers the best mix of coverage and cost.
Investing in a Roth 401(k) is another savings vehicle to consider, as you can withdraw your retirement savings tax-free, freeing up additional dollars to fund health care in retirement. Consider converting a traditional 401(k) into a Roth 401(k); you can convert all or part of your traditional 401(k), and you can stagger conversions to lower your taxable income in the years you convert.
Using tax-friendly health savings accounts (HSAs), which offer pre-tax contributions, tax-free investment growth, and tax-free withdrawals for qualified health care, can also be advantageous and reduce the onerous impact of high medical costs in your golden years. You can even use your HSA to pay for Medicare premiums. Keep in mind that HSA contribution limits have risen steadily. And before you go whole hog on HSAs, look for hidden costs like fees and yields.
Finally, think about how you might pay for long-term care. You may think you will never need it, but government data show that about 70% of older adults require long-term care. In addition to some of the strategies mentioned above, long-term care insurance and annuities may help fund long-term care needs. Both of these options have downsides, so research them carefully.
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