5 Best U.S. Cities to Save Big on Healthcare

#2 will definitely surprise you…

One of the biggest financial obstacles for retirees is paying for healthcare, according to a GOBankingRates survey. Healthcare in retirement can be expensive, with the average couple needing an estimated $280,000 after taxes to cover healthcare expenses over the course of their retirement, according to the Fidelity Health Care Cost Estimate.

While there is no way to avoid medical expenses — at least not one that doesn’t involve ignoring your doctors — the variation in healthcare market costs from region to region do mean that where you’re spending your golden years can play a major role in what you can expect to spend.

The study looked at those cities where the average annual healthcare costs per capita were under $5,000, then scored that data along with the average out-of-pocket costs and income for those age 65 and older to come up with a final ranking of cities where retirees could potentially pay less for medical care.

#5: Buffalo, NY

Annual Healthcare Spending Per Capita: $4,095
Annual Out-of-Pocket Spending Per Capita: $741
Income of Age 65+ Households: $31,909

Another city where healthcare costs and incomes are both low, Buffalo residents are spending about 12.8 percent of their income on healthcare on average — lower than some but still higher than many.

#4: Spokane, WA

Annual Healthcare Spending Per Capita: $4,591
Annual Out-of-Pocket Spending Per Capita: $697
Income of Age 65+ Households: $43,831

Spokane is one city where the out-of-pocket medical costs faced by the average resident are relatively affordable. Just 15.2 percent of total medical costs and 1.6 percent of the average income are going to out-of-pocket medical expenses in a typical year for the average senior citizen in Spokane, both of which are among the lowest levels in the study.

#3: Rochester, NY

Annual Healthcare Spending Per Capita: $4,192
Annual Out-of-Pocket Spending Per Capita: $707
Income of Age 65+ Households: $27,998

Annual healthcare costs in Rochester are nearly $1,000 lower than the national average of $5,141, making it one place where you can find relatively affordable healthcare costs. Except that the average retiree household is earning just under $28,000 a year, meaning the proportion of annual income going to healthcare costs — about 15 percent — is the highest in this study.

#2: Washington, DC

Annual Healthcare Spending Per Capita: $4,663
Annual Out-of-Pocket Spending Per Capita: $662
Income of Age 65+ Households: $59,086

Although the total healthcare spending isn’t especially low, the high-income levels for the average 65-or-older household in our nation’s capital mean that this is the city where the smallest portion of income goes to healthcare costs — just 7.9 percent of that $59,086 a year.

#1: Tucson, AZ

Annual Healthcare Spending Per Capita: $3,674
Annual Out-of-Pocket Spending Per Capita: $648
Income of Age 65+ Households: $39,448

Although incomes in Tucson are relatively modest for age-65-and-older households, the average annual spending on healthcare per capita is a bit more modest. At $3,674, this is the only city in this study with costs under $4,000 a year — a bar Tucson cleared by over $300 a year.