Health care costs for retirement can be an eye-opening and even frightening data to interpret. As revealed in our previous post, Be Money-Savvy with a Supplemental Medicare Insurance Plan, a significant number of baby boomers have a hard time managing their finances during the twilight years.
And this is why retirement solutions such as Medicare Supplemental Insurance Plans make sense. The safety net granted by a policy will allow boomers to experience retirement just the way they imagine it to be.
As a way for us to let more people comprehend the urgency to seek coverage, we’d like to share some impactful retirement health care data. And even if these nuggets of information may seem scary, the knowledge one may attain from the data may lead to a more cautious and proactive take on how to plan for the future.
That urgency may just be the thing that most need to make a push towards the future they desire and deserve!
As mentioned in our previous post, a Commonwealth Fund report stated that even Medicare beneficiaries face difficulty in handling their health care finances during the retirement years. Just last year, 15 million policyholders (or one-fourth of Medicare beneficiaries) spent approximately 20% of their household income on insurance premiums and out-of-pocket health care costs. Taking the out-of-pocket costs in a clearer perspective, this would cost $3,024 per year!
According to the Insured Retirement Institute study, Boomer Expectations for Retirement 2016, only 55% of the survey’s respondents said that they had created a savings account for retirement (down from 58% from the study prior to the most recent one). Also, only 24% of the respondents claimed to be confident that their nest egg will last throughout the retirement phase of their lives.
Savings are indeed crucial when preparing for retirement, for health care costs is rising. The National Health Expenditure Data (compiled by the Centers for Medicare and Medicaid Services) has projected that for the years 2016 to 2025, national health spending will grow at an average rate of 5.6 per year. Additionally, J.P. Morgan Asset Management’s Health Care Costs in Retirement report revealed that some of the key contributors to the increase in health care spending are the integration of new medical technology, the lack of cost-sharing solutions, and increases in provider fees.
Inadequate health literacy skills can also result in heavier expenses to shoulder. Only 12% of adults in the country, as stated by the National Assessment of Adult Literacy, have the necessary skills and knowledge on how to interpret and make use of available health information. Accordingly, the lack of these core competencies will result in longer hospital confinement, more emergency room visits (some of which are even unnecessary), higher mortality rates, and non-compliance to treatment plans and the like – all bearing an expensive price tag to be frustrated about!
Lastly, women (unfortunately) have the short end of the stick in retirement health care planning. Mainly because of a female’s longevity, their expected health care costs (in future dollars) may reach up to $362,607 – 29.9% more than male counterparts (HEALTHVIEW SERVICES: 2017 Retirement Health Care Costs Data Report).
We hope that the date above will help you realize why you should plan and consider securing retirement solutions today. Please make sure to get the best Medicare Supplement Plans to cover your retirement gaps by speaking with an insurance agent now!
We hope all the best for you and please do leave a comment below if you have any questions.