Your Senior Health Care Bill: $260,000!

I have always been a big fan of Howard Gleckman, author of Caring for Our Parents.  In fact, he was the very first person I interviewed for my Leaders in Elder Care series.  If you aren’t familiar with Howard’s blog, you’re really missing out on a complete play-by-play of how the health care debate is impacting the cost of senior care.

This morning, he shared some startling statistics about paying for elder care that I have quoted below.  In this article, Howard has links to some fascinating studies about the out-of-pocket costs for seniors, and it is shocking.  It is mind-boggling to me how financing elder care will be solved as we move forward. He wrote:

A typical couple would have to save nearly $200,000 to pay for their out-of-pocket medical costs from the time they are 65 until they die, according to an important new study by the Center for Retirement Research at Boston College. Add in nursing home costs, and they are likely to need $260,000.

But that’s only part of the story. About 5 percent of 65-year-old couples will face catastrophic medical and long-term care costs exceeding $570,000, according to researchers Anthony Webb and Natalia Zhivan.They estimate those expenses would have exhausted the total financial assets of 85 percent of all retirees even at the peak of the stock market in 2007.

As someone who has first-hand experience with out-of-pocket expenses and my Mother’s care, I was still so stunned by these numbers, that I could not write a conclusion to this article.  What do you say?

Obviously, I encourage you to check out Howard’s writing.  In the meantime, what are your thoughts about these big numbers?

Photo: bubble dumpster

  • Lou Jacobelli

    My thoughts on these big numbers are simple:

    1. Reality bites.
    2. The vast majority of Americans will never accumulate enough money to satisfy the existing system.
    3. The existing system must be changed to accommodate human beings; not money.
    4. I could go on and on about this subject but I'll stop here. Suffice to say that you hit a sore spot.

  • ryanmalone

    Hey Lou -

    You are so right! I read a very interesting article in Fortune magazine recently that discussed this topic. It was an interview with the CEO of the Cleveland Clinic. He said that 75% of Americans' healthcare costs can be directly attributed to lack of exercise, smoking and obesity, and that regardless of what public policy goes in place, healthcare costs are going to rise substantially. This is because of these three problems multiplied by the number of Americans who are aging.

    They keep costs down by having docs on salary – as opposed to compensation for procedures, and they have only one year contracts. At the end of the year, the get measured and it is determined whether they get a raise, a promotion or perhaps let go. They also focus advanced healthcare at hi-tech hospitals and routine stuff out in the regional hospitals, rather than everything everywhere.

    It's a good read. Here's the link:
    http://money.cnn.com/2010/02/17/news/companies/…

  • http://twitter.com/matthewbjohnson Matt Johnson

    Smart point about the Cleveland Clinic. It's amazing what can be done in a closed loop system. When you can control costs and quality, you get better value.

    Since congress is presuming that bad health and high costs are permanent, they're focusing exclusively on who pays for care.

    Imagine what could be done if, instead, they focused on better health and lower costs.