At the center of just about every conversation in Washington these days is one topic: the Health Care System that will emerge from the current tangle of proposals moving through the halls of Congress. Right now, all eyes are on the United States Senate and the deliberations underway on the “Better Care Reconciliation Act of 2017” (BCRA), and what will emerge as the Affordable Health Care Act replacement is pretty much anybody’s guess.
While all the deliberations take place, though, America’s seniors are keeping a close watch on the trajectory of their health care costs. And this trajectory is clearly upward, with some projections putting the projected yearly growth to be well above 5% for the next eight years (at least). In fact, the Centers for Medicare & Medicaid have estimated the 2017 total tab for health care expenditures to be more than $3.5 trillion, a level of spending that is growing at a rate exceeding our economy’s Gross Domestic Product (GDP) . At the very least, an understanding of what lies ahead for those in, or aging into, their retirement years is critical to their financial planning, and that’s why some organizations are dedicating resources to tracking the details associated with health care cost projections.
One such organizations is actually a joint project of United Health Foundation and the Alliance for Aging Research, and their work is summarized in a recently-published issue brief titled “Preparing for Health Care Costs in Retirement: An America’s health Rankings Issue Brief.” This publication assesses how well retirees (current and future) are preparing for the road ahead, with an eye toward the adequacy of their financial preparedness. While the issue brief presents a number of statistical recaps of the state of this preparedness, the opening line in the report probably sums the problem up best:
“While most people have given great thought to where they will live and what they will do when they retire, few are well-versed in planning for their future health care expenses. Yet without adequate preparation, the high costs of both anticipated and unexpected health care needs can adversely impact seniors’ overall health and financial well-being in their retirement years.”
Given that as a lead-in, the issue brief’s key findings paint a picture of impending concern for the future landscape facing America’s seniors. Specifically, that:
- Many current and future retirees are at risk of not being able to afford the high costs of health care in retirement.
- A high percentage of current and future retirees are unsure about how much to save to cover both anticipated as well as unexpected health care costs.
- Current and future retirees with retirement savings of $20,000 or less are more likely to be in poor health, have chronic disease, and have lower incomes than those with higher rates of retirement savings.
The information presented in this and many similar studies appearing regularly in the media are a sort of wake-up call for the future, and have an objective of creating awareness that will transform into action. It’s also important that all Americans clearly understand the financial side of the health care debate, and that this understanding serves as fuel for their involvement and interaction with government officials as the current debate unfolds.
You can download the United Health Foundation/Alliance for Aging Research issue brief here…