The United States’ spending on healthcare, as a portion of our economy, has gone through the roof and is expected to continue growing rapidly. “In 2018, the U.S spent approximately $3.65 trillion dollars on healthcare,” according to economists for the Centers for Medicare and Medicaid Services (CMS).
They found national healthcare payments are projected to grow by 5.5% between 2018 and 2027, with the cost of healthcare-related services and products to grow by 2.5%. An Axios report says that, based on this research, Americans spent $11,121 per person on healthcare in 2018, a 4.4% increase from 2017. Now, what does this mean for you and all our retirees? According to CNBC, in 2019, a retired married couple could spend as much as $285,000 throughout their retirement on healthcare. A retired man’s healthcare cost is estimated at $135,000 while it’s $150,000 for a woman.
However, these costs can rise quickly, depending on illnesses, disabilities and special needs. So, the protection of our earned healthcare benefits is critical. Even with programs like Medicare and retirement benefits earned during your working years, such significant cost spikes will have a real impact. Medicare, the main insurer for those of us 65 and older, is expected to see a 4.6% per person spending growth rate, with greater expansion in healthcare costs in the coming years, meaning higher costs for individuals, according to
CNBC.
The National Association of Plan Advisors (NAPA) finds that medical expenses for 85-year-olds are as much as 250% higher than those for a 65- year-old! In addition, the Kaiser Family Foundation says the average premium increased 4% and the average family premium increased 5% from 2018. According to the National Bureau of Economic Research (NBER), people over 70 are charged more for medical expenses than other age groups.
According to the Medicare Payment Advisory Commission (MedPac) in a June 2019 report, due to the mismatch between the qualifying age for Medicare (65) and Social Security (67), retirees are paying late registration fees for Medicare, because they’re registering for it as much as two years after they qualify. In fact, MedPAC estimates that this has already happened to 20% of beneficiaries.
In addition, MedPAC says that billing information regarding different plans under Medicare is often unclear, leading to unnecessary payments for beneficiaries and that the number of primary care physicians providing services under Medicare is slowly decreasing. MedPac predicts that access to primary care physicians will continue to become more difficult. Already, Medicare spending on drug coverage has increased by 10% annually since 2009, due to rising drug prices.