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Benefits March 28, 2005
Fidelity: Estimated Retirement Health Costs Jump 8.6%
March 28, 2005 (PLANSPONSOR.com) - The costs of
medical care for the average 65-year old are now estimated at
$190,000 over the next 15 to 20 years, according to Fidelity
Investments.
Reported by Kip McDaniel
This estimate is 8.6% higher than that of last year, according to a press release from Fidelity. The estimate includes Medicare Part B & D premiums (which make up 31% of the expected costs), out-of-pocket prescription drugs (33%), and other costs such as copayments, coinsurance, and deductibles (36%). It does not cover things such as over-the-counter medications and long-term care.
If there is any bright spot with the increasingly high costs of health care it might be that pre-retirees and recent retirees are aware of the problem, with 60% ranking it as a top concern. However, 33% of the group did not understand what Medicare actually covered, according to the report.
As a possible solution – or at least a mitigation – of the problem, Fidelity suggests that employees can be more cost-conscious through the use of employee-directed health and retirement plans.