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February 24, 2003 at 07:00 PM
NU Online News Service, Feb. 24, 3:53 p.m. – Some retirees might need to be millionaires to prefund medical costs, according to researchers at the Employee Benefit Research Institute, Washington.
The EBRI came to that conclusion by considering the case of a 65-year-old retiree without employment-based health benefits. If the retiree lives to age 100 and medical inflation averages 14% per year, the retiree will need about $1.5 million to prefund lifetime out-of-pocket medical expenses, the EBRI researchers estimate.
If the same retiree has employment-based insurance that covers prescription drug costs, the prefunding level might be about $500,000, but only 27% of U.S. residents over age 65 have employment-based benefits, EBRI says.
