Retirees projected to need $225,000 per couple for medical costs


According to an annual study released by Fidelity Investments, a couple retiring this year will need about $225,000 to cover lifetime medical costs. The study assumes no employer-sponsored retiree coverage. It includes Medicare premium payments, copayments, and deductibles, as well as out-of-pocket prescription drug costs.

The figure has increased 4.7% since 2007. Fidelity’s first study in 2002 found that a couple needed $160,000 in savings to fund medical costs in retirement. Given current levels of savings, 6 in 10 retirees are “at risk” of not being able to maintain their standard of living (Eileen Alt Powell, Associated Press 3/6/08).

The very first cause listed for the rising costs, notes Dr. Lawrence Huntoon, is “the cost of a doctor’s visit”—expected Medicare fee cuts notwithstanding. Other causes are stated to include increased utilization, new technology, and increasing incidence of chronic diseases such as diabetes.

The study assumes, apparently, that Medicare will somehow be able to continue current premiums and benefits.

The federal government projects that by 2017, consumers and taxpayers will spend more than $4 trillion on medical care, $1 of every $5 spent, with the amount increasing at nearly three times the rate of inflation. The percentage paid by federal and state governments is projected to increase from 46% in 2006 to 49% over the next decade.

“Medicare, on its current course, is not sustainable,” testified Health and Human Services Secretary Michael Leavitt (Kevin Freking, Associated Press 2/26/08).

Neither John McCain, Hillary Clinton, nor Barack Obama listed dealing with the coming crisis in financing retirees’ medical care among their stated goals, according to the Kaiser Family Foundation. Obama calls for “expanded public insurance.”

The AMA’s National Health Care Policy Agenda also fails to mention this problem. It simply calls for Congress and the next Administration to “permanently replace the flawed payment formula.” Nor does the AMA allude to the problem in its ten questions for candidates.

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