Rising health care costs are projected to be the most burdensome expenses in retirement, but minimal behavioral change can significantly lower the price tag. These conclusions are from HealthView Services 2017 Retirement Health Care Costs Data Report, which draws from 70 million health care cases as well as actuarial, government and economic data.
According to a HealthView case study cited in the report, a 50-year-old with Type II diabetes who follows doctors orders can potentially add eight additional years to life expectancy and save an average of $5,000 annually in out-of-pocket costs before retirement. The firm notes that if the same individual invests that sum into a fund that earns a 6% return, that person would have more than $120,000 by age 65 or an extra $14,000 per year (assuming the person lives to the actuarial projected age of 80). With another $2,750 per year in health care savings in retirement, this individual would have generated almost $17,000 more in annual retirement income.
These findings emphasize the importance of communicating effective benefits packages in order for employees to make the most out of the offerings most beneficial to them. Adding a health component to financial wellness programs or adopting programs that incentivize healthy behavior may help as well.
But participants who dont address their health issues through behavior modification could be looking at a very expensive retirement, as could employers enduring higher health care costs.
According to HealthView, retirement health care cost inflation is expected to increase at an annual rate of 5.47% for the next decade. This translates to triple the rate of inflation between 2012 and 2016, and more than double the projected Social Security cost-of-living-adjustments (COLAs).
The study indicates that a healthy 65-year old couple retiring today is expected to need $321,994 to cover total health care costs in retirement, when factoring in projected expenses for Medicare Part B and D premiums, as well as supplemental and dental insurance. When accounting for deductibles, copays, hearing, vision, and cost sharing, that number jumps to $404,253 in todays dollars or $607,662 in future dollars.
Medicare Part B premiums alone jumped by 16% in 2016. So far in 2017, they have increased by 10% despite a 24% decrease predicted by the Medicare Board of Trustees.
HealthView Services reports that the main driver behind these rising expenses is the increase in retirement health care inflation.
The report notes that Through a short-term lens, the average 65-year-old couple that retires in 2017 will pay $11,369 in their first year for health care$670 more than the same couple retiring in 2016. By age 85, those 2017 retirees will spend $39,208 (or $1,915 more for the same coverage than last years retirees).
Women in particular may face a larger burden due to increased life expectancy. HealthView finds that women live on average two years longer than men. The firm projects that expected health care costs for a healthy 63-year-old woman retiring this year (living to age 89) would need $362,607 in future dollars or 29.9% more than a 65-year-old male.
But regardless of age or gender, the firm finds that minimal behavioral change can reduce health care expenses and boost savings as well as longevity.
Although these numbers may seem out of reach, the savings required to cover health care when meeting retirement savings goals are often more modest than might be expected, says HealthView President and CEO Ron Mastrogiovanni. A 55-year-old can increase 401(k) contributions by as little as $17 per paycheck to address their retirement health care premiums, assuming a company match of 50% and they are meeting an 85% incomer replacement ratio savings goal.
The full 2017 Retirement Health Care Costs Data Report can be found at HVSFinancial.com
The rest is here:
Reducing Health Care Costs Through Behavioral Modification - PLANSPONSOR
- How good is fish for your diet? - November 8th, 2009 [November 8th, 2009]
- What foods have both fiber and protein? - November 8th, 2009 [November 8th, 2009]
- Is There Evidence That Acupuncture Works? - November 8th, 2009 [November 8th, 2009]
- What are some good fiber foods? - November 8th, 2009 [November 8th, 2009]
- Can Green Tea fight HIV infection? - November 8th, 2009 [November 8th, 2009]
- Quality of GNC Supplements - November 8th, 2009 [November 8th, 2009]
- The Gene Smart Diet - November 8th, 2009 [November 8th, 2009]
- Tips for eating in a vegetarian lifestyle - November 8th, 2009 [November 8th, 2009]
- Regarding the Starting of a new diet regimen - November 8th, 2009 [November 8th, 2009]
- Thoughts on Dropping Weight - November 8th, 2009 [November 8th, 2009]
- What do doctors think about vitamin E supplements? - November 8th, 2009 [November 8th, 2009]
- What herbs or supplements are commonly used for depression? - November 8th, 2009 [November 8th, 2009]
- Is there a safe way to lose a lot of weight? - November 8th, 2009 [November 8th, 2009]
- Diets that promise you will lose weight - November 8th, 2009 [November 8th, 2009]
- Are Fish Toxins Linked to Diabetes? - November 8th, 2009 [November 8th, 2009]
- Can Plastic Surgery Help Migraines? - November 8th, 2009 [November 8th, 2009]
- Weight Loss Surgery Eradicates Diabetes Symptoms - November 8th, 2009 [November 8th, 2009]
- Found: A Gene That Controls Fat Cells - November 8th, 2009 [November 8th, 2009]
- Sugars and Starches, what's the difference? - November 8th, 2009 [November 8th, 2009]
- Improving your health with a serving of nuts? - November 8th, 2009 [November 8th, 2009]
- Is Your Diet Causing You To Be Depressed? - December 13th, 2009 [December 13th, 2009]
- Placebo Effect: Magnetic Bracelet Therapy - December 13th, 2009 [December 13th, 2009]
- Does serotonin promote sleep? - December 13th, 2009 [December 13th, 2009]
- Decreased energy levels - Overeating, Sleep, Nutrition - February 1st, 2010 [February 1st, 2010]
- When will the body begin to cannibalize muscle tissue? - February 7th, 2010 [February 7th, 2010]
- Foods that are high in antioxidants - February 7th, 2010 [February 7th, 2010]
- Editorial: Reduce health care costs by cutting administrative overhead - April 1st, 2012 [April 1st, 2012]
- Health Care Winners: Centene, Onyxx - April 25th, 2012 [April 25th, 2012]
- Dan Morain: Nurses union puts politics ahead of health - April 25th, 2012 [April 25th, 2012]
- What's next if Obamacare falls? - April 25th, 2012 [April 25th, 2012]
- Global Managed Health Care Services Industry - April 25th, 2012 [April 25th, 2012]
- Immigration Fight Echoes Health-Care Case at High Court - April 25th, 2012 [April 25th, 2012]
- Medical Centers Lead Workplace Wellness Effort - April 25th, 2012 [April 25th, 2012]
- The next health care overhaul? Look to employers - April 25th, 2012 [April 25th, 2012]
- Capital BlueCross Hosts Community Health Care Forums Focused on Managing Costs While Maintaining Quality - April 25th, 2012 [April 25th, 2012]
- County committee to look at area health care - April 25th, 2012 [April 25th, 2012]
- President Obama Calls on Students to Tell Congress: #DontDoubleMyRate - Video - April 25th, 2012 [April 25th, 2012]
- Sen. Coburn: Competition in Health Care to Allocate Resources - Video - April 25th, 2012 [April 25th, 2012]
- Jesse Kelly health care - Video - April 25th, 2012 [April 25th, 2012]
- PHC Vision Statement (short version) - Video - April 30th, 2012 [April 30th, 2012]
- The Bioeconomy Blueprint Panel - Video - April 30th, 2012 [April 30th, 2012]
- Providence Health Care's Vision Statement - Video - April 30th, 2012 [April 30th, 2012]
- Department of Health and Human Services: Minority Health Blogger Townhall - Video - April 30th, 2012 [April 30th, 2012]
- Health care worker accused of stealing identities of brain i - Video - April 30th, 2012 [April 30th, 2012]
- Health Care Reform, Part 1 of 3 | KYVE Insiders Roundtable - Video - April 30th, 2012 [April 30th, 2012]
- Health Care Reform: The ACA and Beyond - Video - April 30th, 2012 [April 30th, 2012]
- Is Broccoli Like Health Insurance? - Video - April 30th, 2012 [April 30th, 2012]
- Did Obama make a mistake on health care? - Video - April 30th, 2012 [April 30th, 2012]
- How Democrats Lie About Health Care - Video - April 30th, 2012 [April 30th, 2012]
- Toobin on Health Care: This was a "judicial hissy-fit" - Video - April 30th, 2012 [April 30th, 2012]
- President Obama says health care law will stand - Video - April 30th, 2012 [April 30th, 2012]
- Obama Defends Health Care Law From 'Judicial Activism' - Video - April 30th, 2012 [April 30th, 2012]
- Obama Healthcare Individual Mandate - Video - April 30th, 2012 [April 30th, 2012]
- President Obama attacks Supreme Court on health care - Video - April 30th, 2012 [April 30th, 2012]
- Raw Audio: High Court Dissects Health Care Act - Video - April 30th, 2012 [April 30th, 2012]
- Health care on trial - Video - April 30th, 2012 [April 30th, 2012]
- Final Day of Health Care Law Arguments Before Supreme Court - Video - April 30th, 2012 [April 30th, 2012]
- Feds to put up $1.9B for Oregon health overhaul - May 4th, 2012 [May 4th, 2012]
- Scuttling health care act will freeze Medicare, White House warns - May 4th, 2012 [May 4th, 2012]
- U.S. Health Care Spending High, But Quality Lags: Report - May 4th, 2012 [May 4th, 2012]
- Yes, the Health-Care Mandate Is About Liberty - May 4th, 2012 [May 4th, 2012]
- Health center gets $1M federal grant - May 4th, 2012 [May 4th, 2012]
- Health-care reform panel considers exchange options for Va. - May 4th, 2012 [May 4th, 2012]
- Hmong health care gap focus of Healthy House dinner - May 4th, 2012 [May 4th, 2012]
- Walsh-led health bill to be unveiled - May 4th, 2012 [May 4th, 2012]
- Ontario health system confusing for ailing seniors, study finds - May 4th, 2012 [May 4th, 2012]
- 'Health Care Deserts' More Common in Black Neighborhoods - May 5th, 2012 [May 5th, 2012]
- With federal money, Oregon kicks health care reform into high gear - May 5th, 2012 [May 5th, 2012]
- Nurse practitioners tackling more 'doctor' tasks - May 5th, 2012 [May 5th, 2012]
- Konza Prairie Health Center Receives $4.5 Million Grant - May 5th, 2012 [May 5th, 2012]
- Alberta wages hurting Sask. health care - May 5th, 2012 [May 5th, 2012]
- House releases plan to cut growth of Massachusetts health spending in half - May 5th, 2012 [May 5th, 2012]
- Mass. House Will Unveil Bill Seeking To Rein In Health Costs - May 5th, 2012 [May 5th, 2012]
- President Obama Welcomes the Kentucky Wildcats - Video - May 5th, 2012 [May 5th, 2012]
- President Obama Speaks on College Affordability - Video - May 5th, 2012 [May 5th, 2012]
- My First Job: Gene Sperling - Video - May 5th, 2012 [May 5th, 2012]
- Health-care costs worry near-retirees - May 7th, 2012 [May 7th, 2012]
- Massachusetts Institutes Health-Care Price Controls. Is America Next? - May 7th, 2012 [May 7th, 2012]
- Massachusetts Moves Toward Health-Care Price Controls. Is America Next? - May 7th, 2012 [May 7th, 2012]
- GOP plan boosts Pentagon, cuts social programs - May 7th, 2012 [May 7th, 2012]