Health Care Costs Catch Retirees Off Guard
People often overlook the rising cost of health care during retirement, much of it out-of-pocket. Debra Whitman, chief public policy officer for AARP, said these costs can top 20 percent of median income for 75-year-olds to 29 percent for people 80-plus.
Medicare, in its many parts, was never designed to cover all health care costs. For instance, it doesn’t cover visual, hearing or dental costs. While health care costs overall have remained relatively low in recent years, Whitman said the cost of brand-name prescription drugs is skyrocketing – up 13 percent in 2013. Part of the cost can be traced to exorbitantly high-priced so-called “blockbuster” drugs. The hepatitis drug Sovaldi costs $84,000 a year, for instance. Whitman said new blockbuster drugs are coming to market this year. One cholesterol drug will carry a pricetag of $10,000 a year; as many as 15 million people may be clamoring for it.
Another looming expense is long-term care. Average annual costs for nursing home care run more than $90,000 a year. Can you afford that?