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Economic Brief

May 7, 2019

Richmond Fed Studies Retiree Medical Spending

Research highlighted in the Richmond Fed’s May Economic Brief concludes that lifetime medical spending for retirees is high and uncertain in the United States. Households headed by people who turned 70 in 1992 will incur $122,000 in medical spending on average, including out-of-pocket expenditures and Medicaid payments during their remaining lives. And the top 5 percent of households will incur more than $300,000 in such spending.

Those levels of spending and the gap between them diminish only slowly with age. The research confirms that households’ income, initial health and initial marital status have large and predictable effects, but events at older ages account for much of the differences in lifetime medical spending. The study includes Medicaid payments, but it does not include expenses covered by Medicare or private insurers.

The Richmond Fed’s Economic Brief series provides web-exclusive essays on economic issues and trends. Sign up to receive an email notification when a new essay is posted.


As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District—including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia—to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.

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