Lifetime of healthcare costs up 11% in one year, study shows

A lifetime's toll of out-of-pocket costs for healthcare services is 29 percent higher this year than in 2005, and 11 percent higher than 2014 alone, according to Time.

Fidelity Investments estimates a 65-year-old couple today will have paid $245,000 in co-pays, deductibles and other out-of-pocket healthcare spending over their lifetime, not including the cost of long-term care or most dental and vision healthcare, according to the report.

A main reason for the rapid increase is revised mortality tables, which for the first time show the average newborn will reach age 90. The average 65-year-old woman will reach 88.8 years and the average 65-year-old man will reach 86.4 years. The added years to life expectancy in the U.S. will not be free; Fidelity also projects healthcare costs are rising between 4 and 5 percent each year, according to the report.

Other studies have come up with even higher estimated figures. For instance, HealthView Services projects a healthy 65-year-old couple will have paid a total of $266,589 in out-of-pocket spending over a lifetime, and a 55-year-old couple retiring in 10 years will reach a staggering $463,949, according to the report. 

One contributing factor is how only about one-third of large employers currently offer retiree health benefits, down from two-thirds 25 years ago, Allianz Life Insurance said.

High healthcare costs combined with fewer retiree benefits is a significant concern for many. Just one in nine people approaching the age of retirement are confident they will be able to pay for their retirement healthcare needs, a Merrill Lynch survey found. When asked to name their top retirement concern, 72 percent of respondents named health issues, while 47 percent said not having enough money to live comfortably.

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars