Marilyn Moon, American Institutes for Research and TIAA-CREF Institute Fellow
July 2005 |
Over the past two decades, health care spending has tended to grow at twice the rate of overall economic growth. Today's seniors each spend, on average, more than $9,200 per year on health care costs. Employers have been forced to cut back their share of the costs for retiree health care coverage, and growing numbers of employers have dropped coverage altogether. Medicare participation is nearly universal but the coverage is not comprehensive, meaning that most individuals need to cobble together a mixture of public and private health insurance. The new Medicare prescription drug plan will be subsidized by the government and likely will be an advantageous new benefit for people lacking insurance for prescription drugs. In short, as people are living longer and longer, retiree health care will cost more and more. Individuals need to be as informed as possible about their options and plan ahead for funding retiree health care.