Time & Attendance
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By Staff Report
Mar. 25, 2010
A 65-year-old couple retiring in 2010 without employer-provided retiree health insurance will need about $250,000 to pay future medical-related expenses, Fidelity Investments said in an analysis released Thursday, March 25.
This amount, up from $240,000 last year, includes expenses such as Medicare premiums, co-payments and deductibles. The higher tab for retiree health expenses comes as the number of employers offering such coverage shrinks, increasing the number of retirees who must pay a major portion of their health care expenses.
Significant drivers of increases in retiree health care costs include higher provider charges and increased expenses associated with new technology, Fidelity said in the analysis.
Of the $250,000 needed to cover a retired couple’s health care expenses, Fidelity estimates 30 percent will go toward paying Medicare Part B and Part D premiums; 40 percent will be consumed by expenses not covered by Medicare, such as co-insurance and deductibles imposed by Medicare; and 30 percent for out-of-pocket prescription drug expenses.
A summary of the analysis is available at http://personal.fidelity.com.
Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail firstname.lastname@example.org.
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