The Center for Retirement Research at Boston College just issued a new study on the expected costs for health care by a couple aged 65. The expected present value of the lifetime health care costs excluding nursing home care is $197,000.00. In 2007 married couples age 65 and up averaged annual expenses of $7,600.00 for Medicare premiums, co-pays and other out of pocket expenses.
Older couples over the age of 65 had a 5% risk that they would spend more than $311,000.00 for health care over their lifetime at present value. Remember the present value is the value that is needed in hand today and invested to pay for a future expense. The interest rate factor was not stated in the abstract. “And when nursing home costs are included, the amount for a typical couple increases from $197,000 to $260,000, with a 5-percent risk of exceeding $570,000.”
The abstract did not discuss how families are expected to pay for medical services they cannot afford. Few couples have enough savings to meet all of the uninsured costs that they can expect to incur. The unmet costs will be paid via Medicaid, state programs and local medical providers, assuming the patients actually receive care. Typically services are provided in the event of a medical emergency, but not for chronic pain and illness such as arthritis, osteoporosis, COPD and other illnesses.