How Much Does It Cost to Be Healthy at Each Stage of Life?
Key takeaways:
Getting older is expensive. Medicare helps lessen that burden beginning at age 65.
In their 20s and 30s, only about a quarter of people in the U.S. have to manage an expensive condition. This percentage increases with age, and nearly three-quarters of people in their 60s have an expensive condition to manage.
For individuals ages 26 to 40, larger family sizes may negatively impact health costs, resulting in higher expenses. These may be due to the increased healthcare needs of dependents.
Within our society, there is a general belief that the higher someone’s income, the easier it is to spend the time and money needed to improve their health. GoodRx wanted to find out how much household income someone needs to be healthy.
Using nationally representative health and household income data, the GoodRx Research Team attempted to identify a “healthy tipping point.” In other words, at what household income level is a person more likely to be healthy than unhealthy?
We found that, for the most part, the minimum income required to be healthy increases from someone’s 20s to their 60s. While household income increased with age, yearly out-of-pocket expenses for medical care also went up.
What’s more, whenever there was a lower healthy tipping point, it was likely affected by federal healthcare policies. For example, the healthy tipping points for those in their 20s and 60s are the lowest for all age groups, even though we found that average medical expenses increased with age. The most probable explanation is that programs like Medicare for people ages 65 and older, and expanded insurance for young adults under age 26, help bring down some of their costs.
In the end, it’s more challenging to maintain one’s health with a lower household income. Here’s more on the healthcare costs for each decade, and how and why these income thresholds change.
Young and healthy: 20- to 30-year-olds
Healthy tipping point: $0
Median household income per year: $58,035
Average out-of-pocket healthcare expenditures per year: $431
Percent of age group below tipping point: 0%
Percent of age group managing one (or more) expensive conditions: 27%
In general, 20- to 30-year-olds are relatively healthy at every income bracket, with fewer expenses on average than the other age groups. They also have fewer recommended screenings and deal with fewer conditions that are considered expensive to manage, relative to the overall population.
Our designation of an expensive condition was based on the Agency for Healthcare Research and Quality’s analysis of the top 10 most expensive conditions in the U.S. to manage. That list includes the following: heart disease, cancer, mental disorders, trauma-related disorders, osteoarthritis, asthma, hypertension, diabetes, back problems, and hyperlipidemia.
Additionally, adults in their early to mid-20s can remain on their parents’ insurance until age 26, keeping their own out-of-pocket healthcare expenses lower.
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Average incomes are lowest among this group as young people begin their careers, continue their education, or switch professions entirely. The largest spenders on healthcare for this group come from those managing expensive conditions and the rare emergency care visit. In fact, those 20- to 30-year-olds with an expensive condition spent twice as much on out-of-pocket healthcare expenses compared to those without an expensive condition ($788 versus $368, respectively).
Young families, high costs: 30- to 40-year-olds
Healthy tipping point: $30,000 to $40,000
Median household income per year: $72,609
Average out-of-pocket healthcare expenditures per year: $656
Percent of age group below tipping point: 17%
Percent of age group managing one (or more) expensive conditions: 33%
Once people are in their 30s, we found that the tipping point income for being healthy rises to between $30,000 and $40,000.
As people enter this decade, they have the same suggested preventative health screenings for cervical cancer, breast cancer, and diabetes as adults in their 20s. But this group also has moderate increases in average total healthcare expenses (an increase of $225) as well as in the proportion of people managing expensive conditions (an increase of 6%) compared to adults in their 20s.
Not to mention that 30- to 40-year-olds are more likely to have younger dependents, with an average family size of 3.3, leading to a jump in the cost of personal and family health expenses. The average individual in this group spends $656 out of pocket per year just on their own healthcare. Once you factor in children and/or dependents, those out-of-pocket costs can quickly add up.
Managing and preventing chronic conditions: 40- to 50-year-olds
Healthy tipping point: $50,000 to $60,000
Median household income per year: $80,000
Average out-of-pocket healthcare expenditures per year: $724
Percent of age group below tipping point: 30%
Percent of age group managing one (or more) expensive conditions: 48%
We found that the minimum income to be healthy for individuals in their 40s is $50,000 to $60,000, which is at least $20,000 higher than what it was in the previous decade.
What’s driving that rise? For one thing, between ages 40 to 50, individuals undergo more frequent screenings for colorectal cancer, prostate cancer, breast cancer, lung cancer, and diabetes. This coincides with almost half of individuals ages 40 to 50 managing at least one expensive health condition, which is a spike of 15% compared to people in their 30s.
Given that people in this age group spend more on their healthcare, those who manage to maintain a high level of health have a greater average household income. For people in their 40s, we found that 30% of people fall below the healthy tipping point for their age group.
The highest tipping point: 50- to 60-year-olds
Healthy tipping point: $70,000 to $80,000
Median household income per year: $82,076
Average out-of-pocket healthcare expenditures per year: $1,138
Percent of age group below tipping point: 43%
Percent of age group managing one (or more) expensive conditions: 62%
In this decade, the cost to maintain health is the greatest. For 50- to 60-year-olds, there are a number of suggested preventative health screenings, including cervical cancer screenings and mammograms for women, and prostate exams and colonoscopies for men. Additionally, 62% of individuals in this age group manage at least one expensive condition, leading to average total healthcare expenses of $8,358 ($1,138 out of pocket).
That number is a significant bump in total healthcare costs compared to people in the previous decade, who spend $5,576 ($724 out of pocket). Although people in their 50s have a higher average income than all other age groups, 43% of people in their 50s still fall below the tipping point threshold of $70,000.
The Medicare effect: 60- to 70-year olds
Healthy tipping point: $40,000 to $50,000
Median household income per year: $63,973
Average out-of-pocket healthcare expenditures per year: $1,349
Percent of age group below tipping point: 32%
Percent of age group managing one (or more) expensive conditions: 71%
At first glance, it may seem surprising that the cost of being healthy decreases from ages 50 to 60, to 60 to 70, especially given that total expenditures are nearly $3,000 higher in the older age group. On top of that, 71% of people in their 60s report managing an expensive condition, leading to highs in total expenses ($11,071) and out-of-pocket expenses ($1,349).
So why is the healthy tipping point decreasing at this stage?
The primary reason for the lower income threshold among this group as compared to people in their 50s is the role of Medicare. When we looked only at ages 60 to 64, we found that their healthcare out-of-pocket expenses were greater than healthcare out-of-pocket expenses for those in the 65 to 70 age group. Medicare kicks in for adults who reach 65, so the cost to maintain health decreases and the minimum income needed to be healthy also decreases.
We can see how this might play out by looking at average out-of-pocket costs, which are $85 lower annually for individuals over 65 compared to individuals ages 60 to 64. The point: Medicare makes being healthy at a lower income easier.
Summing it all up
The expected income required to live a healthy life varies depending on age group. For younger adults in their 20s, we found that individuals are healthy across the board – regardless of income. But that changes as people age.
Some of the results we found are not entirely unexpected: Healthcare expenses tend to increase with age, and higher incomes help with affordability. Also, people managing expensive conditions are more likely to be unhealthy, given the chronic and often debilitating nature of the conditions. Even so, many of the people we looked at (30% of 40- to 50-year-olds, and 43% of 50- to 60-year-olds) may not have enough income to cover their medical expenses and could end up with poorer long-term health.
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Co-contributors: Sasha Guttentag, PhD, Tori Marsh, MPH, Amanda Nguyen, PhD
Methodology
Using the Agency for Healthcare Research and Quality’s Medical Expenditure Panel Survey data from 2018 and 2019, we divided self-reported health into two groups: healthy and unhealthy. From the three rounds of surveys for each panel, we used the Full Year Consolidated Data Files (H209, H216), Medical Conditions Files (H207, H214), and the Office-Based Medical Provider Visits File (H206, H213).
If an individual described themselves as healthy in two or more rounds, they were given a healthy label. The sample population was individuals aged 20-69.
Tipping points were defined as the income bin when a larger proportion of respondents reported being healthy than unhealthy. Having expensive conditions is defined as an individual who manages at least one of the following, as indicated by the Agency for Healthcare Research and Quality: heart disease, cancer, mental disorders, trauma-related disorders, osteoarthritis, asthma, hypertension, diabetes, back problems, and hyperlipidemia.
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