Baby boomers who have lost their health insurance coverage often speak of trying to find a way to make it to Medicare. But even after you reach age 65 and finally qualify for the government health insurance program, you’re still likely to face significant costs.
A 65-year-old couple retiring in 2009 will need approximately $240,000 to cover medical expenses throughout their retirement, even with Medicare insurance coverage, according to a Fidelity Investments estimate released this week. This figure is up 6.5 percent from last year’s estimate of $225,000. Over the past 7 years the amount has jumped $80,000 from Fidelity’s $160,000 estimate in 2002, a 50 percent increase.
Fidelity’s estimate assumes that retirees have no employer-provided retiree health insurance and a life expectancy of 17 years for men and 20 years for women. The $240,000 figure includes deductibles and coinsurance costs retirees are likely to pay for Medicare Part A and B, premiums and out-of-pocket costs for Medicare Part D prescription drug coverage, and some services excluded by Medicare. But the estimate does not take into account over-the-counter medications, most dental services, and long-term care expenses, the last of which could easily cause this number to further skyrocket.
Fidelity attributes the spike in expected health care expenditures to higher costs for doctor’s visits and diagnostic tests, expenses associated with new technology, and general price inflation. But there are a few things you can do to help your cause. Check out these 8 tips for paying for health care in retirement.