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Published: Nov 14, 2022 5 min read
Older man paying medical expenses out of pocket

Americans who pay for health insurance on their own could spend nearly $700,000 for health care over the course of their adult lives, according to a new study.

That is more than double what Americans who have employer-sponsored insurance are forecasted to pay — about $320,000 — which is a staggeringly high figure in its own right.

Synchrony released a new study Monday on the lifetime costs of health care in the U.S., analyzing how much insured people will likely spend on insurance and treatment.

The financial services company calculated estimates for lifetime health care costs by adding up the amounts Americans are likely to spend over the years on premiums, copays, prescriptions, over-the-counter medication and coinsurance costs (the portion of medical charges people pay after deductibles are met).

The calculations do not include the hefty costs that some people incur related to care for chronic illnesses, serious illnesses or elective procedures.

People with employer-sponsored health insurance are expected to spend an average of $3,180 per year on monthly premiums, $1,310 on out-of-pocket costs and $776 on coinsurance, Synchrony reports.

Over the course of 61 years — the adult lifetime of someone who lives to 79 — that adds up to $321,226. Synchrony says inflation is not factored in to its estimates, so the actual costs people face in the future are likely to be much higher.

Health care costs are higher than Americans think

Health insurance premiums are likely to rise in 2023, potentially by a larger amount than in previous years, according to a recent report from the nonprofit Kaiser Family Foundation. This year, for people with employer-sponsored health insurance, families are spending an average of $6,106 on annual out-of-pocket costs and singles are spending an average of $1,327, according to Kaiser.

The Synchrony survey of about 3,200 respondents found that Americans do not expect to spend nearly as much money on health care expenditures as they actually do. When it comes to out-of-pocket expenditures, for example, actual spending is 145% higher than people think.

The company's study breaks down the yearly average out-of-pocket costs for people with employer-sponsored health insurance by subcategory:

  • ER visits: $127
  • Urgent care visits: $74
  • Specialist visits: $151
  • Primary care visits: $183
  • Durable medical equipment: $112
  • Over-the-counter medications: $239
  • Prescription medications: $424

Only a fraction of Americans are putting enough money aside to pay for these health care costs. Less than half of respondents in the Synchrony study say they are saving for future health care costs at all, and only 55% of people who are saving think that they are putting away enough money. On average, Americans are saving about $200 per month for health care, the study found.

"There is a meaningful gap between people’s perceptions and the reality of the costs of health care," Alberto Casellas, chief executive officer of health and wellness at Synchrony, said in a news release. "Today's consumers set aside money for college or a mortgage, but not for health care."

The survey also shows that younger people are much more likely to skip a health care visit or treatment if it costs too much. Half of the respondents born after 1964 say they would hold off non-urgent medical care if it cost between $500 to $999, while a third of older Americans say they would do that.

The high costs of health care and lack of savings are deterring many Americans from getting certain treatments, Synchrony found. More than a quarter of respondents say they have delayed a recommended procedure due to cost, and 46% of those people say that holding off led to further medical problems.

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