Many Retirees Don't Realize They Will Have to Foot Rising Health-Care Costs
April 7, 2003
As medical inflation kicks in again, waves of employers are ditching or scaling back medical coverage for their retired workers. And studies show that a 65-year-old who retires today and lives to be 85 can expect to pay out around $100,000 for health care. Experts say many seniors don't realize that.
- As of now, only about one-third of seniors enjoy any sort of job-based health coverage -- down from nearly 50 percent a decade ago.
- While many seniors look to Medicare, it doesn't pay for prescriptions or catastrophic illnesses -- and most insurance plans to supplement Medicare rarely include drug coverage.
- Even if prescription drug coverage is added to Medicare, it would subsidize only about 20 percent of drug costs.
- Many companies have capped annual health payouts for retirees and about half of them have hit that ceiling -- which means that they must pay for rising costs in the future.
The upshot is that a great many seniors will find themselves underinsured, and most have not yet come to grips with that fact, health policy analysts warn.
Source: Howard Gleckman, "Old, Ill and Uninsured," BusinessWeek, April 7, 2003.
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