As President Obama prepares to detail changes he’s made to his healthcare overhaul proposal today, March 3, a new study conducted by the Center for Retirement Research (CRR) at Boston College and underwritten by Prudential Financial has found that healthcare costs for retiring Americans, including nursing home care, average $260,000 and can exceed $500,000.
The study, “What is the Distribution of Lifetime Health Care Costs from Age 65,“ found that in more than 300,000 simulations of healthcare cost expenditure patterns that households could experience, the average remaining uninsured lifetime healthcare expenditure for a typical married couple age 65 is $197,000. This amount, the study says, represents the present value of the couple’s premiums for Medicare and private insurance, out-of-pocket payments, and home health costs, but does not include nursing home care. While the $197,000 represents the average, the study states that many households will incur greater expenditures–a typical household has a 5% risk that the present value of its lifetime uninsured healthcare costs will exceed $311,000. Factor in nursing home costs, and the amount for a typical couple increases to $260,000, with a 5% risk of exceeding $570,000, according to the study.
“Even at the peak of the stock market in 2007, less than 15% of households approaching retirement had accumulated that much [$570,000] in total financial assets, much less financial assets available for healthcare costs,” states Alicia Munnell, director of the CRR.