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.