Healthcare is a huge expense plaguing Americans today. Blue Cross and Blue Shield reports (November 2018) that rising prescription drug costs, treating chronic diseases and unhealthy lifestyle choices are the three key factors driving U.S. healthcare costs. They report that between 2010 and 2025 prescription drug prices are expected to increase by 136 percent.1 Treating chronic diseases like cancer, heart disease and obesity along with unhealthy behaviors such as tobacco use and excessive alcohol consumption are contributors as well. As you approach retirement, there are a few things to consider regarding healthcare:
- Life expectancy
When considering healthcare and any expenses related to healthcare, life expectancy plays a major role as many individuals are living well into their 80’s and 90’s. According to the Social Security office, a man reaching age 65 today can expect to live until age 84.3 on average and a woman turning 65 today can expect to live to 86.7. And, one out of every four 65-year-olds today will live to be 90 years old and one out of 10 could live past the age of 95.2 Average cumulative health care expenses including premiums for a 65-year-old male in excellent health can be upwards of $345,000 and the estimate for a 65-year old male in poor health is about $246,000.3 Those in excellent health will spend less on an annual basis but more during their retirement years due to longer life expectancies.
- Medicare limitations
Medicare is a health insurance plan for people who are age 65 or older and if you are not already getting benefits, you should contact the Social Security office about three months prior to your 65th birthday. Many individuals think that Medicare pays all medical expenses but in actuality, it doesn’t pay for long-term care and only pays for a small piece of the first few days in a nursing home. Medicare doesn’t cover everything and therefore Medicare supplemental insurance may be needed to pay for medical expenses which are not covered.
- A longer life means higher healthcare costs
Healthcare costs are going up just like the costs of everything else so not only are we living longer, but we are having to spend more money on healthcare today. Blue Cross and Blue Shield reported (November 2018) that healthcare spending in the United States is $3 trillion a year, placing a huge strain on families and businesses. The cost of caring for individuals with long-term medical conditions or chronic health problems, an increased cost of new medicines, procedures and technologies and a population who is living way into their 80’s and 90’s are all factors contributing to the rising dilemma.