Watch those misleading reports and numbers

Health care will likely be your biggest expense during the golden years. It’s obviously a tough number to nail down and one that will vary by person, but there are estimates out there. A 65-year-old, healthy couple can expect to spend $266,600 over the course of their retirement on Medicare premiums alone, according to HealthView Services. An estimate from Fidelity is a little less: $245,000. Neither include out-of-pocket expenses or long-term care costs. Source: CNN Money

But that’s not what HealthView Services says at all. 

It says:

The average lifetime retirement health care premium costs for a 65-year-old healthy couple retiring this year and covered by Medicare Parts B, D, and a supplemental insurance policy will be $266,589. 

You have probably heard these scary numbers before and they are scary, but remember we are talking about monthly expenses over a retirement lifetime. Add up what you will spend on gasoline or cable TV over 25-30 years and those are scary numbers too. 

What’s also scary is that for the most part these premium costs are not income based or only minimally so. The fact is despite Medicare, health insurance premiums for seniors are less affordable than for younger individuals at similar income levels. 


5 replies »

  1. Please explain this number? Medicare Part B cost is presently $134 per month. $136 x 12 months x 20 years equals $32,160. The cost of a Medicare Supplement Plan F ( which is the Cadillac plan) on a national average is $236 per month (NY $444 / San Jose $168) per Bankrate. So, $136 x 12 months x 20 yrs equals $56,600. Together this equals $88,760 a far cry from $266,600. What am I missing? I realize this doesn’t factor in prescriptions but CMS has protections in place to such as catastrophic coverage.

    What am I missing?


    • First, you forgot Part D premiums. The numbers presented are for a couple and I believe they use 30 years, not 20. They also added rising premiums over future years.


      • I did address the fact that Part D premiums were not taken into consideration. However, if you take the average Part D premium which is $35.63 for 2017 per CMS, x 12 x 20 = $8,551 added to the $56,600 you still only get to $65,151. For two people this is still only $130,302 a far cry from $266,600. Sorry, I cannot use the 30 year schedule. Show me the statistics that show that on average seniors that are 65 years of age today will typically live 30 more years. Or, two people from the same household will likely live to age 95. I would like to believe that I will and am prepared financially but do not believe that it will happen. I guess I have to believe your heading of “Watch those misleading reports and number”. I believe your report is misleading.


      • I didn’t do the calculations, but some pretty competent experts did. Did you account for cost inflation reflected in all the premiums? Even at a modest 6% they skyrocket pretty quickly.


  2. Yes these numbers are scary but to me they are a very realistic starting point. Let’s assume that two healthy people buy health insurance for 20 years. In this day and age, $13,300 per year (or $1,111 per month) is not unexpected or unreasonable for private insurance. Many are paying more right now while they are working, some less through company plans. But $13,300 x 20 yrs = $266,000 during the time of their life when they will need the most healthcare. This to me is reasonable or even cheap considering what you used when you are 20 yrs old. I do not find any of those numbers misleading.

    The question becomes how does a person making $15 / hr ($31,320 / yr) save for retirement and medical after already spend $13k on present day medical insurance and still pay all other current living expenses with the $18k left over.

    I believe that the answer will be that most people will work until their health prevents them from getting out of bed and there will be more multigenerational households like it was before the 1930s. I believe the factors that caused this is the medical technology allowed people to live longer which destroyed pension plans. Also the cost of this technology has helped the make healthcare unaffordable to the masses.

    Affordable, accessible healthcare is not in the Bill of Rights. Healthcare has become a moral issue hot topic. I doubt I’ll live to see what happens to this issue once the mass of people start retiring without pensions or savings. Will people start dying in the streets again?


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