Related topics: insurance, retirement, health insurance, health care, long term care
Keeping healthy and fit when you retire should result in lower health care costs, right?
A new report says it's not so.
It's true that the annual health care costs of healthy retirees are lower than those in poor health -- $6,500 versus $8,000 for those ages 65 to 69. But the healthy face higher lifetime health care costs, according to a report from Boston College's Center of Retirement Research.
Over a lifetime, healthy retirees may pay as much as $105,000 more than those in poor health, according to the report, which was sponsored by Prudential Financial.
Why is that?
Expect to pay more, eventually
The overarching factor is that those in good health can expect to live significantly longer than those in poor health.
"At age 80, people in healthy households have a remaining life expectancy that is 29% longer than people in unhealthy households, and, therefore, are at risk of incurring health care costs over more years," the report said.
The report says people in healthy households face a higher lifetime risk of requiring nursing-home care than those who are unhealthy. That reflects their greater chance of surviving to advanced old age, when the need for such care is highest.
Few have a handle on the costs associated with long-term care. And with good reason. Those costs range widely, not just by type of long-term-care service -- home-based care costs are much lower than facility-based costs -- but also by region, according to Genworth's seventh annual survey of long-term-care costs.
In general, you'll pay $18 per hour for licensed-homemaker services, $19 per hour for the services of a licensed home health aide, $60 per hour for adult day health care, $3,185 per month for an assisted-living facility (one bedroom/single occupancy) and $206 per day for a private room in a nursing home, according to Genworth. But those are just averages. (You can examine the state-by-state costs for various long-term-care services at this website.)
Facing chronic disease
Although healthy people live longer, the report said, many of those currently free of any chronic disease will eventually develop one or more such illnesses. In running a simulation, Boston College found that individuals who are free of any chronic diseases at age 80 can expect to spend one-third of their remaining life suffering from one or more such diseases.
"Those currently in good health would be unwise to infer that they will continue to enjoy lower-than-average health care costs," according the Boston College report. "The reality is that even the currently healthy can expect to eventually suffer from one or more chronic diseases, which often results in high out-of-pocket and long-term-care costs."
