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What’s driving healthcare retirement costs?

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 How financial advisors can help

According to a new study published by HealthView Services, healthcare costs in retirement are expected to rise more than 4 percent annually for the foreseeable future, with total retirement healthcare costs projected at $363,946 in today’s dollars, or $537,334 in future value.

Though the rate of increase has slowed a bit compared to years prior, healthcare costs are still rising faster than inflation.  The 2018 Retirement Healthcare Costs Data Report identifies the following factors as driving costs in retirement.

Drug costs

Increased generic utilization, increased rebates and the closing of the Medicare “donut hole” has slowed the rate of increases, but pharmaceutical spending remains a key driver of healthcare costs in retirement.

Medical costs

Shared-savings arrangements are reducing medical cost pressure, but planning ahead for expected and unexpected costs remains a core part of comprehensive financial planning.

Other factors that affect healthcare costs in retirement include Medicare Part B premiums, especially for affluent who Americans who pay more, as well as long-term care costs.

To help clients manage these and other healthcare costs, more and more financial advisors are building healthcare and health coverage advisory services into their practices’ client offerings.

One way to do this is to partner with licensed insurance advisors. At Bernard Health, we have more than 10 years of experience helping consumers tackle Medicare and other healthcare costs and coverage concerns. To learn more about how we partner with financial advisors to address client needs, click below to schedule a consultation.

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