65? Got $215,000 to spend on your health care costs?

For those "rugged individualists" who plan on opting for the "defined contribution" STRS retirement here's an estimate of what kind of bucks they will have to spend on medical care for the rest of their lives! Of course, with the high deductibles of the current STRS healthcare insurance coverages (and the high premiums-especially for spouses) maybe one should take the risk and say, "The heck with healthcare insurance, I'll take my chances!"

John [Curry]

Kaiser Daily Health Policy Report

Houston Chronicle, March 28, 2007
kaisernetwork.org
Coverage & Access

65-Year-Old Couple Retiring in 2007 Will Need $215,000 for Future Health Care Costs, According to Fidelity Estimate

An average 65-year-old couple retiring this year will need about $215,000 for health care costs for the rest of their lives, according to a Fidelity Investments estimate released on Tuesday, the AP/Houston Chronicle reports. Fidelity calculated the estimate assuming that retirees had no employer-sponsored health coverage and that average life expectancies were 82 years for men and 85 years for women. The costs do not include over-the-counter medications, most dental services and long-term care. Fidelity estimated that about 32% of retiree health care spending would be on Medicare premiums for physician visits, outpatient hospital care and prescription drugs. Thirty-five percent of the expenses would come from Medicare copayments, deductibles and other cost-sharing provisions. Out-of-pocket prescription drug costs would account for 33% of retirees' health care spending, according to Fidelity. Fidelity estimated that 65-year-old workers who plan to retire at the end of the year should expect that 50% of their pretax Social Security benefits will be consumed by health expenses within the next 16 to 18 years. The latest estimate is 7.5% greater than the estimate released in 2006. Retiree health care expenses annually have increased by an average of 6.1% over the past five years. Fidelity projects health care costs will increase by about 7% per year, outpacing inflation. Brad Kimler, senior vice president for Fidelity Employer Services, attributes the rising costs to higher-cost medical technologies and prescription drugs, and longer life expectancy. "We don't expect to see this number going down," he said (Jewell, AP/Houston Chronicle, 3/28).