Medical and long term care costs soaring for seniors
Fidelity Benefits Consulting estimates are wreaking havoc on what many couples thought they would need to have in savings at retirement. The new estimates are $15,000 higher just in medical costs alone, and that may be underestimating the real costs that many couples will face.
In order for a typical 65-year-old couple to pay for out-of-pocket long-term and medical care in their old age, they need to save almost $400,000. That is about $60,000 more than what a regular couple has saved when they retire –including their home’s equity! Fidelity says that an older couple needs, on average, $260,000 (in today’s money) for medical costs they must pay out-of-pocket even if they have Medicare. They will also need over $130,000 to ensure they won’t need nursing home care or long-term supports and services at home.
Fidelity has been estimating the costs of medical care for many years. However, this is the first time that they have included long-term care in their estimates. In order for a long-term care insurance policy to cover a regular 65-year-old couple fairly generously, it would cost the couple about $260 each day for three years. That’s also accounting for annual inflation protection of 3 percent.
The take-away from all of this is that most people haven’t saved enough to pay for long-term or medical care when they get older. There are a lot of reasons for this, such as not understanding what Medicare covers and what it doesn’t, having little left over when the bills are paid and being in denial about having any need for long-term care when they get older. For those that are curious, about 66 percent of those that are 65 years old will need some long-term services and supports before they pass away.
If you are concerned about how your health care future looks with the insurance policies you have in place, an attorney can help ensure that your claims are paid promptly or that any denied claims are appealed within the proper time frame.
Source: Forbes, “The Staggering Cost Of Long-Term Care And Medical Care in Old Age,” Howard Gleckman, Aug. 31, 2016