New Data Shows Retiree Health Care Costs Exceeding Average Social Security Benefits
According to a recent article in Investment News, a new Retirement Health Care Cost Index released by HealthView Services shows that Social Security benefits for middle-income retirees are on track to be surpassed by the retirees’ average health care costs. The index looks at the percentage of Social Security benefits needed to pay health care costs for a healthy couple in retirement who receives average Social Security benefits. According to the analysis, retirement health care costs will increase from 69% of Social Security benefits for a couple retiring in 2015 to 98% for a couple retiring in 10 years—those retiring 20 years from now will need 127% of the average Social Security benefit to pay for their heath care costs.
To calculate the total cost of health care in retirement, the index includes all Medicare Part B, Part D and Medigap premiums, as well as out-of-pocket costs such as co-pays, the portion of a service that the beneficiary must pay. The index also uses $1,294 in today’s dollars as the average amount of Social Security benefits per month. According to the data, an average healthy couple retiring next year will spend about $366,600 during their retirement—in 10 years that number will increase to about $421,000 for newly retired couples. Meanwhile, estimated health care cost inflation is set at 5 percent to 7 percent per year, while the annual cost of living increase in Social Security benefits is expected to increase by 2 percent per year.
Rising costs in the Medicare program have been slowing over the past few years; however, there is still much that needs to be done. While many in Congress propose to cut costs in Medicare by shifting the health care cost-burden onto people with Medicare, this data shows that the average retiree cannot afford to pay more. In the fact sheet, Build on What Works: Medicare Cost Savers, The Medicare Rights Center lists some positive steps that can be taken to further reduce health care costs in Medicare, including restoring Medicare drug rebates, scaling back wasteful overpayments to Medicare Advantage plans, and advancing the delivery and payment system innovations of the Affordable Care Act.
Click here to read the Investment News article.
http://www.investmentnews.com/article/20140417/FREE/140419921
Click here to read Medicare Rights’ fact sheet, Build on What Works: Medicare Cost Savers.
http://www.medicarerights.org/pdf/Medicare-Cost-Savers.pdf?utm_source=Medicare-Watch-email&utm_medium=e-mail&utm_term=mcw&utm_content=mcw&utm_campaign=MCW+4.25.14
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You shouldn't have to be going through all that. 
My parents were very lucky, and had good health for many years. Two years ago, my mother got breast cancer at age 73, and last year my father was diagnosed with a bone marrow disorder. He will be 84 this year, still works. Due to my father having insurance through his job, they were not bankrupted by their medical bills.
These projected costs are scary to me, because I'm still several years from retirement age. Don't know how I'll handle medical issues, but will probably die early if I get something bad.
