A new study has revealed that only a few Americans are considering the health care costs in retirement to be of vital importance. The rest are just taking it for granted. A major reason behind this negligence could be that people are dependent on their employer contributions in the medical insurance premiums. It has been suggested that people must start saving for medical expenses in retirement by including it in the planning stages.
The Study of Health Care Costs in Retirement
The study that revealed that the health care costs in retirement are not a major concern for Americans was shared by HealthView Services’ 2016 Retirement Health Care Costs Data Report. It stated that only 12 percent of working Americans have taken any steps towards addressing their medical expenses in retirement.
A major reason why people are not as concerned about the health care costs in retirement as they should be is that they are used to having an employer deal with a good percentage of their medical insurance premiums. The company benefit is so vital for them that they have started depending on it a lot. They don’t know what they will do if the employer discontinues paying the medical bills due to reasons like downsizing or retirement.
If one takes an example of a married couple that is either in the late 50s or the early 60s, they would have to buy an expensive health insurance plan because they would most probably have more health ailments due to the age. In such a scenario, the couple would need about $18,000 a year which is not in their retirement budget.
The High Cost Premiums
The study also highlighted that the total projected health care premiums, Parts D, B and supplemental insurance for a healthy couple aged 65 who expects to retire this year is around $288,400 over the lifetime. The cost can go up to $377,412 is the hearing, vision, dental, deductibles, copays are factored in. If a person is 55 right now, the cost can even go as high as half a million dollars.
A solution suggested by experts to people who wish to avoid these high insurance premiums is that people should start considering health care costs in retirement planning and should save a chunk of money for this purpose only as these health care costs will only increase in the future.