Are you prepared for growing healthcare costs?

Healthcare is one of the single biggest — and fastest-rising — lifetime expenses for most Americans. The exact number depends on your age, health, location, and the benefits you carry, but the total estimated lifetime healthcare costs may surprise (or even shock) you.

Concerningly, many Americans don’t have a clear picture of their potential healthcare costs while working and during retirement, or how to estimate these fast-growing living costs for planning purposes.

For example, a 25-year-old could pay anywhere from $400K+ to ~$1.5M for healthcare over their lifetime depending on personal decisions, medical needs, insurance coverage, and inflation rates.

Does your financial plan include annual estimates for healthcare costs with projected inflation?

Below I’ll sketch projected lifetime (or remaining lifetime) healthcare costs, and explain why tracking and managing these costs over time is crucial for your financial stability and well-being.

Estimating the cost for healthcare over your lifetime

For a relatively healthy worker with employer-sponsored insurance, a working estimate is $400K+ over their adult lifetime for healthcare costs. If you are uninsured or have higher risk, the number could be much higher, approaching $600 – $700K or more.

In my recent blog about the cost of achieving the “American Dream,” the average cost one person would need for healthcare over their entire adult life (from ages 22 to 85) was estimated at $414K by Investopedia.

Couples and families pay much more! Over the lifetime of a family covered under employer-sponsored healthcare plans, the cost can easily exceed a million dollars. And this doesn’t include healthcare costs during retirement.

A Jackson study found that nearly two-thirds of pre-retiree investors underestimate their expected health care retirement costs. According to Fidelity, a couple starting retirement together at ages 65 can expect to pay ~$345K for healthcare during their retirement years, excluding Long-Term Care (LTC) insurance which can easily add $100K+.

Average costs for LTC insurance

LTC insurance is a policy that helps cover the costs of care if you have a chronic illness or disability and are unable to perform basic daily tasks. Since LTC services (nursing home, assisted living..) are not covered by Medicare, this type of insurance can help protect your savings from being depleted by these expenses.

The Jackson study found that only 27% of investors surveyed believe they will require long-term care at some point in their lives, however, 70% of individuals turning 65 each year are likely to need this type of care at some point in their lives.

LTC is often not included in many healthcare cost estimates, and can add ~$86K in premium costs for individuals and ~$146K for couples on average for a policy purchased at age 65.

To self-insure, a couple should aim to save at least $250,000 to $500,000 to fund long-term care, depending on their location and expected costs, according to industry estimates. While there is no single magic number, a good starting point is to estimate potential costs and ensure you have enough liquid assets to cover at least three to five years of care.

Average costs for direct private insurance

If you don’t have access to employer or government sponsored healthcare plans, then you will need to buy private insurance directly if you want coverage. Some states, like New Jersey, require residents to have healthcare insurance. But even if not mandated by your state, it is highly recommended that you have healthcare insurance due to significant financial risks. Medical bills are one of the leading causes of personal bankruptcy in the U.S. Having insurance can help protect you from the full financial burden of unexpected medical events.

The average premium costs for unsubsidized private health insurance is estimated to be ~$6K+ annually for an individual and around ~$24K+ annually for a family, based on eHealth analysis. This does not include out-of-pocket costs and can vary significantly based on age, location, plan tier, and plan type.

Many private plans are subsidized. Currently, about 90% of ACA policyholders qualify for subsidies, or tax credits, to offset the cost of their monthly premiums. Without government subsidies monthly private insurance premiums will increase significantly and many people will be forced to drop their plans. The Kaiser Family Foundation estimates that the annual out-of-pocket premium for the average subsidized household will more than double from $888 in 2025 to $1,904 in 2026, and the Congressional Budget Office estimates nearly 4 million fewer people will have health insurance because of the policy change.

Tracking and managing healthcare cost over time

Tracking your healthcare costs regularly is crucial because it provides financial clarity by helping you understand exactly where your money is being spent on premiums, deductibles, co-pays, and out-of-pocket maximums, thus preventing unexpected budget strain. Furthermore, it enables you to identify errors in billing and claims, which are surprisingly common, and allows you to make informed decisions about future healthcare choices, such as evaluating the cost-effectiveness of different plans, providers, or treatments to ensure you are receiving the best value for your investment in well-being.

Final thoughts (and additional resources)

Healthcare spending is not a static line item — it’s an evolving risk that often surprises people late in life. Using recent industry estimates to understand your lifetime costs, tracking your spending, and mitigating financial risks with insurance can transform a looming, uncertain expense into a manageable part of your financial plan. The sooner you start measuring, the more options you’ll have to shape the outcome.

There are three information briefs available if you would like to better understand the math behind these projections, and discover tips for buying insurance and tracking your healthcare costs. (click on link to download PDF):

(1) U.S. healthcare cost estimates, inflation forecast, and affordability