By Jerry Geisel, Crain News Service
CHICAGO (June 16, 2014) — A 65-year-old couple retiring in 2014 without employer-provided retiree health insurance will need about $220,000 to pay future medical-related expenses, Fidelity Brokerage Services L.L.C. said in an analysis released June 12.
That’s unchanged from last year, with that stability in costs driven by a decrease in utilization of discretionary healthcare services—such as elective surgeries—and a provision in the 2010 federal healthcare reform law that has expanded Medicare coverage of brand-name prescription drugs once retirees’ drug costs hit a certain level.
Still, while costs have remained stable, “The only real prescription to prepare financially for healthcare costs in retirement is to plan well in advance to optimize health and wealth,” Brad Kimler, Fidelity’s executive vice president of benefits, said in a statement.
Of the $220,000 needed to cover a retired couple’s healthcare expenses, Fidelity estimates that 32 percent will go toward paying Medicare Part B and Part D premiums, 45 percent will be needed for expenses not covered by Medicare and 23 percent will be spent on out-of-pocket prescription drug expenses, Boston-based Fidelity said.
This report appeared on the website of Crain’s Business Insurance magazine, a Chicago-based sister publication of Tire Business.