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By: FEDweek StaffA report has warned that retirees may face higher costs for health care in retirement than they expect, especially if they have a chronic condition.
The Center for Retirement Research said that in 2018, the latest year for which the data it needed were available, the median—the point at which half are above and half are below—for retiree medical costs was $4,311, including both the cost of premiums and out of pocket expenses for costs not covered by their insurance.
However, a look at total spending showed that those above the median spend more in addition to the median amount than those below the median save. For those in the 25th percentile, the figure was $2,598, only about $1,700 below the median but for those in the 75th percentile it was $6,403, about $2,100 above.
And for those in the 90th percentile of spending—that is, they spent more than 90 percent of others—it was $9,638 and for those in the 95 percentile it was $10,947. That difference was “mostly due to outlays for cost-sharing and uncovered services,” it said, adding that the comparison did not take into account expenses for long-term care.
The report found little difference by gender, saying that on average women pay slightly lower premiums than men but their out of pocket costs are slightly higher. Nor is there much difference by health status it said, with the exception that spending is notably higher for those with a chronic condition.
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