(Medicare) Retirees Need $130,000 Just to Cover Health Care, Study Finds

[Sgent]

Today's 65-year-olds can expect to spend an average of $130,000 on health care during their retirement, from premiums to co-payments to eyeglasses, according to new estimates.

The average single 65-year-old woman can expect to need $135,000 to spend on health care in retirement, while a man will spend $125,000, according to estimates from Fidelity Investments. (The difference is because the woman is expected to live longer—an additional 22 years, vs. 20 years more for the man.)

Every year, Fidelity estimates how much it will cost for today's average 65-year-olds to cover health-care expenses for the rest of their lives if they retire now. For a while, it looked as if health care costs were holding steady, but Fidelity this year says couples need to set aside a record $260,000 for Medicare premiums and all other out-of-pocket medical costs—up 6 percent from last year and 18 percent from 2014.

Prime culprits in accelerating health expenses are prescription drugs, especially high-priced specialty drugs, Fidelity says. And as the economy recovers, retirees are using more health care, driving up costs.

http://www.bloomberg.com/news/articles/2016-08-16/retirees-need-130-000-just-to-cover-health-care-study-finds

[HughBeaumont]

1. . . . . and the average person has, what, $50,000 TOTAL saved for their retirement?

GET RID OF FOR-PROFIT WEALTHCARE. MAKE IT A SUPPLEMENT, NOT THE RULE. The arguments for keeping this decades-behind-the-world system are getting lamer and lamer every day.

[The_Casual_Observer]

2. These are the same people that insist that

You must have at least 2 million set aside for retirement.
They are in the business to sell their investments.

[underthematrix]

3. I'm 65, married and our care is excellent and costs reasonable

I think the costs will move toward cheap as we move toward the public option

[stopbush]

4. Medicaid is an option if your income falls below a certain level.

[csziggy]

10. Not necessarily - I know of two cases where Medicaid is not available

My brother in law makes all his money buying and selling on eBay. He does not make enough to pay health insurance premiums but he is below the threshold for the ACA subsidies. Because Governor Rick Scott did not expand Medicaid, he makes too much to get that. So he has no health coverage right now.

The other case is a couple I know that are both on Social Security Disability. They get less than $1800 a month. When they were working, they got Medicaid but now that they are both unable to work, they suddenly were not eligible. At least they were able to get coverage through the ACA - they have to pay almost $200 a month for that but at least they have coverage.

In states where the Republican governor or legislature didn't expand Medicaid, there is a hole that leaves out a lot of people. Fortunately there seems to be leniency in the mandate that does not require a penalty but that does not provide any coverage for healthcare.

[yortsed snacilbuper]

5. "retirees are using more health care, driving up costs."

Getting regular check ups probably drives down costs, it's cheaper to have a colon exam than get cancer and die a painful death.

[yeoman6987]

6. That's odd. I can't imagine spending near that much

$125.90 total for a three night stay in the hospital. 104.00 a month for Medicare 68.00 for secondary. 30 a month for dental/eye coverage. I hope I don't pay that much.

[JenniferJuniper]

7. I thought it looked low

But I think a lot depends on the sort of ailments you get as you get older.

My father has pretty standard problems and all of his drugs are generic.

My mother has less typical ailments and her co-pays and much worse, her non-generic RXs, are very high. They both pay over 300 a month for Medicare and secondary coverage, so you figure that alone is nearly 8k a year.

[trof]

8. It's unrealistic to say you have to "set aside" $260,000.

It's not like you have to have that in a savings account the day you retire.
I'm 75.
So far our income from S/S, my pension, and IRA has covered our annual living expenses, including medical care.
I will say that Medicare premiums and co-pays have gone up an uncomfortable amount in the last few years.

[Vinca]

9. You have to take a close look at what's being prescribed for you and if it's really necessary.

IMO, one of the biggest problems for older people is being loaded up with drugs. Take statin drugs, for example. If you're already old, what's the point? It's unlikely the benefit will outweigh the risk.