We’ve all heard about the one percent, those people making more money in a month than most of us will ever make in a lifetime. Maybe not for them, but health care costs have many of the wealthy worried.
Jeffrey Young, at the Huffington Post, wrote that, according to a new survey by Nationwide Financial and conducted by Harris Interactive, “46 percent of people 55 or older who have assets of at least $250,000 and plan to retire by 2020 say they are ‘terrified’ that health care costs will foul up their retirement plans’ and 30 percent of those already retired reported the same anxiety.”
As someone who has already had her share of astronomical healthcare bills, and, as a result, an equally astronomical health insurance premium, I totally understand. My monthly premium is close to $1,000 and even when we switched to a slightly cheaper premium, with a $5,000 deductible, we still got killed. Not only did we have an almost $900 premium to pay every month anyway, but we then had to pay all our medical expenses on top of that. Add a few small procedures and we watched our IRAs float away.
A story in The New York Times today quotes Dr. Otis Webb Brawley, chief medical officer for the American Cancer Society, as sadly and angrily berating politicians for constantly claiming that American healthcare is the best in the world. Tara Parker-Pope writes that the statement may be true for the rich, but “it’s not a great place to be sick if you are poor and uninsured and want consistent basic care,” he told her.
But even if you have the money, how long will you be covered? What if you live to 90 or 100, which is possible today with healthier life styles? Medical costs go up as you age.
Young’s story points out that “a smaller proportion of soon-to-be-retired Americans, 18 percent, are ‘fearful of bankruptcy because of health care costs,’ as are 6 percent of retired people, according to the survey.”
Many retirees are just not prepared for the high cost of medical care in retirement when the company plan is gone. And, too many people believe that Medicare covers most or all expenses. Wrong. Medicare only covers a percentage of your medical bills (hence, all the commercials for supplemental care).
What will healthcare cost us when we’re retired? It’s anyone’s guess but plan on average, Medicare beneficiaries aged 65 to 74 spend $2920 a year in out-of-pocket expenses, according to newretirement.com, and those 75 to 84 spend $3,815, a year. Those 85 and older spend an average of 30 percent of their income.
“Americans -- even those who have diligently saved for their golden years -- are not prepared for the reality of health care costs in retirement and don’t really understand how Medicare works,” John Carter, president of Nationwide Financial Distributors, told Young.
Edited by
Brooke Neuman
