Getting Old Is Expensive

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March 4th, 2010

Old age is not for the faint-hearted
The skyrocketing costs of health care aren’t just bad for Medicare’s solvency. They also spell trouble for the elderly themselves. While much of the debate over controlling health care costs has focused on elderly “entitlements”, in truth Medicare covers only a fraction of the cost of elderly Americans’ health care.

How much will I spend?
A new study, from the Center for Retirement Research at Boston College, estimates that at age 65, the typical married couple should expect to spend $197,000 on uninsured health care costs over the rest of their lives. This total includes insurance premiums, out-of-pocket costs and home health care costs, but it does not include nursing home care. Including the cost of nursing home care, typical lifetime health care costs shoot up to $260,000. Scary, huh?

Everyone?
Not everyone spends “just” $197,000 though. According to this new study, about 5 percent of these households will spend more than $311,000 on their uninsured health care costs, not including nursing home care. Including nursing home care, there is a 5 percent risk that cumulative health care costs increase to $570,000. “Even at the peak of the stock market in 2007, less than 15 percent of households approaching retirement had accumulated that much in total financial assets, much less financial assets available for health care costs,” write the authors of the study.

My experience
I am one of the “older, pensioners” who have to work to subsidize their meager pensions, but luckily, (or cleverly), I have pretty good health insurance. I was recently woken in the small hours of the night by a screaming pain in my back. My wife called for an ambulance and I was rushed to the local hospital. The pain was finally diagnosed as a kidney stone slicing its way down my plumbing system. From the emergency ward I was transported to the urology department and after some days of trying to lure the stone out by various means, none of which worked, I underwent a lithotripsy procedure which shatters the stone to gravel and allows it to pass out. I stayed for another day to make sure everything was in working order.

The shock
The account arrived a few days later and was enough to almost put me back into the heart-attack ward. Luckily I have full medical coverage and the entire experience cost me less than $10. What goes on between the hospital and the HMO is none of my business but I guess they are in a constant state of war. The bill ran to thousands.

Health insurance
For real peace of mind, there is nothing like knowing you have good health insurance. It doesn’t matter how much you have saved “for a rainy day” or an emergency. If a health problem or an accident occurs it can wipe out your savings in a couple of days. Medical procedures improve all the time and their costs spiral accordingly. Make sure you are adequately insured.

This entry was posted on Thursday, March 4th, 2010 at 9:31 am and is filed under Finance, Personal / Internet. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Getting Old Is Expensive

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