Expect an Increase in Health Care Costs During Retirement

When we saw the the Wall Street Journal headline that talked about the increase in health care costs during retirement, even with the help of Medicare and Medigap, we first thought it was for doctors or hospitals.  The big ticket items.  But no, it is primarily for prescriptions.  Wow!

A couple retiring in 2013 with median drug expenses would need $151,000 for a 50% chance of having enough money to cover health costs in later life (assuming they have Medicare Part B and Part D coverage as well as Medigap insurance). But the same couple at the 90th percentile of drug spending would need $220,000—an additional $69,000. (Some good news: Those figures are down from 2012, given that projections of spending growth for Medicare beneficiaries are slowing.)

The article also pointed out that there are ways to control those costs by:

Expect an Increase in Health Care Costs During Retirement
Expect an Increase in Health Care Costs During Retirement
  1. stay on top of changes in Medicare Part D plans (for prescription drugs);
  2. open a health savings account;
  3. take advantage of wellness programs in the office or your community; and
  4. enter retirement in good health.

How are you doing with that list?

How can you ensure that you are in your best health at retirement?

That WSJ article also did a great job of noting where else you can get more information:

  1. Employee Benefit Research Institute: specifically, go to”Publications,” click on “Notes” and see October 2013: “Amount of Savings Needed for Health Expenses” (whew);
  2. the Kaiser Family Foundation, “a Menlo Park, Calif., nonprofit that specializes in health-policy analysis…Under ‘Topics’, then click on ‘Health Reform’
    • The organization’s website offers, among other features, detailed opinion polls;
    • a subsidy calculator (plug in your income, family size, age and tobacco usage) that estimates how the ACA might affect you financially;
    • a list of more than 200 common questions about the program, divided into 16 categories;
    • an infographic with three scenarios that illustrate the cost of health insurance under the act for families in different circumstances, before and after premium subsidies;
    • a flowchart that helps explain what types of health coverage people qualify for in 2014; and
    • a quiz that will test your knowledge of the health law.

Are you still confused about what you need for 2014 and beyond?

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