How much do you think you’ll need when you retire to cover medical costs? One thing changing rapidly is people are no longer being covered by employer provided insurance in retirement. Employer provided insurance is going down the same path as pensions, a once mythical benefit for those old enough to remember it. This Yahoo Finance Article discusses the cost of medical care in retirement.
A couple covered by an employer plan will need between $154 – $235k saved, while a couple without an employer plan will need between $246 – $376k saved. And these numbers don’t include long term nursing home care.
But how to pay for this? Well I would have to say it’s like having a mortgage again. Basically don’t expect your income requirements in retirement to go down. Instead of paying for a mortgage, perhaps it will be replaced by paying for medical insurance premiums or medical care itself.
It’s already happening with Health Savings Accounts and High Deductible Health Plans. The employers are shifting more of the medical costs to the employee. Soon we might no longer have employer provided insurance period and it’s every man for himself. Meaning that if you are unhealthy and overweight, you will not be able to get insurance or only for a very STEEP price.
This is capitalism and free market medicine. Those able to afford care will get it. Those who have money will be able to buy their way to better service. That’s what drives America. Whether this is right is a totally different argument. This system provides for those who care about themselves.
So you’d better get cracking on saving for retirement, and caring for your health. Tomorrow…is $1M enough to retire on even with these rising medical costs? I think so, but only for some.
15 responses so far ↓
1 tom // Jun 11, 2008 at 4:02 pm
I love the 2nd to last paragraph. It is exactly the reason I am 100% against the Democratic health care plans. I pride myself in staying healthy through eating right and working out regularly. I do not want to pay for obese smokers of the US, nor do I want my company to have to share in that burden.
2 Barb1954 // Jun 11, 2008 at 4:26 pm
LAL, you’re not even 30 yet, so why are you worrying about health care costs during retirement.
Tom, just because you eat right and exercise doesn’t mean you won’t develop cancer or another disease. Every American should have access to affordable health care.
3 LivingAlmostLarge // Jun 11, 2008 at 4:47 pm
I think it’s mirroring what will happen to regular employer provided health care for working people now. Already we’re moving to HDHP and away from HMO. We’re dropping more costs to the employee not employer.
Retirement medical insurance is easily taken away, but soon it will be completely capitalistic. Take care of yourself only.
Tom, problem with that attitude is by denying people care, you might find yourself wanting care one day and unable to afford it. Or not have it available because those obese, smokers were doctors.
4 tom // Jun 11, 2008 at 9:54 pm
I’m not denying care to people with hereditary diseases and illnesses. I’m referring to those individuals who make unhealthy choices and need care because of those choices. Why should we have to pay for that? I agree that every American should have access to affordable health care, but if that is the case, then there had better be strict guidelines on lifestyle choices. Also, if my doctor is an obese smoker, then I’d better think twice about receiving care from someone who cannot practice what they preach.
5 Barb1954 // Jun 12, 2008 at 1:34 am
So Tom, in your world, we should stop serving steaks in restaurants or selling them in grocery stores. Or just cut off health benefits for people who eat red meat, which can raise cholesterol? I’m just wondering how you think “strict guidelines on lifestyle choices” would work? In the U.S. that I live in, we all get to choose our own lifestyle.
6 Anonymous // Jun 12, 2008 at 1:49 am
Someone should go ask the Koreans if they want to buy American meat? If they are rioting to stop sale of US beef in their country (after a 5 year stoppage) why are we Americans still eating it?
Not everyone gets ill or high cholesterol from red meat.
We can’t choose our own lifestyles in America anymore. We can’t smoke wherever we want. We can’t have unprotected sex. Kids can’t get soda anymore is schools. Some cities ban trans fats. Go ask Oprah if she will ever say publically she won’t eat a hamburger anymore (lawsuit). You can’t get a good, hot cup of coffee at McDonalds anymore (lawsuit).
I wouldn’t call this ‘choosing our own lifestyle’? Would you?
7 LivingAlmostLarge // Jun 12, 2008 at 2:01 am
Hey some places have no choices about obese, smoking doctors. The number of doctors has not been increased in nearly 50 years, yet our population has grown exponentially.
Why? Because the American Medical Association is trying to keep incomes high, so to produce more doctors would decrease the income.
Also doctors hate becoming primary care which is what we need most, but because it’s so low paying, and NOT prestigious, no one wants to become a primary care or general practice.
I have meet tons of doctors where I work. NOT a single one is a GP. And more than a few smoke and have bad habits.
Gotta say, I doubt things will be changing soon.
8 tom // Jun 12, 2008 at 3:34 am
Barb1954-
Of course, what you’re suggesting is ridiculous. Frankly, I don’t know or care how “strict guidelines” would work. Bottom line is you and I shouldn’t pay to make health care affordable for people who make poor health choices. If you smoke, should you receive free or subsidized health insurance? Absolutely not. If you’re overweight because you are too lazy to work out and eat right should you receive free or subsidized health insurance? Absolutely not. How would you judge that? That’s the million $ question, but that’s for the government to figure out if they want us to pay for such a program.
9 Livingalmostlarge // Jun 12, 2008 at 2:07 pm
Part of the problem is that we don’t have good preventative care. This might help alleviate some of the problems.
If it were easier and cheaper to go for annual physicals, where doctors made concerned comments like in other countries with socialized medicine. Here they can’t say “your fat, go on a diet,” they’ll be sued. But there they can. There they set up a program to see a nutritionist and educate people, unlike in the US, where they can’t say a thing because it’s un-PC and can be sued.
Malpractice is rampant here unlike other countries with socialized medicine. Doctors are running scared and they should be. Here we basically blame them for everything.
In a socialized system, they would be more protected and MANY new doctors I talk to, would very much consider a socialized system. When you pay $60-100k/year in malpractice insurance, it makes it tough to make a living. Hence why so many younger doctors are quitting.
10 Barb1954 // Jun 12, 2008 at 4:17 pm
“Here they can’t say “your fat, go on a diet,” they’ll be sued. . . . There they set up a program to see a nutritionist and educate people, unlike in the US, where they can’t say a thing because it’s un-PC and can be sued. ”
LAL, I don’t know where you got this idea but it is do not true. I know several people whose physicians told them they need to lose weight for health reasons. A doctor cannot be sued for telling a patient that he or she is overweight.
11 tom // Jun 12, 2008 at 7:44 pm
LAL – I agree, preventative care is lacking, but preventative care should start at home. Which is why I keep coming back to smoking. It’s a choice that creates a lot of health problems.
Barb – It’s true. Doctors are so afraid to do anything these days because of frivilous lawsuits. Costs are also rising becuase these doctors run 50 different tests, 49 of them are not needed, because they want to be 100% certain of your condition, or you’ll sue them. And as for a doctor saying “your fat, go the gym” and then getting sued, people get sued all the time for far less than that statement.
12 tom // Jun 17, 2008 at 2:44 pm
Here’s an interesting article about preventative care from the NE Journal of Medicine that might change some minds:
http://content.nejm.org/cgi/content/full/358/7/661
“Although some preventive measures do save money, the vast majority reviewed in the health economics literature do not”
13 LivingAlmostLarge // Jun 17, 2008 at 3:10 pm
Interesting read. I wonder though if preventative care would decrease people’s trips to emergency rooms?
14 tom // Jun 18, 2008 at 4:41 pm
It should… I assume (we all know what that means) that better preventative care would catch medical issues before they need to go to the Emergency Room.
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