Even Affluent Americans Are Concerned About Health Care Costs and Their Impact on Retirement Plans

Nearly three out of four affluent, older adults (73 percent) list out-of-control health care costs as one of their top fears in retirement and 64 percent of future retirees say they are “terrified” of what health care costs may do to their retirement plans. As health care costs rise, even affluent older adults are becoming increasingly reliant on federal programs to cover health care costs.

A new Nationwide Retirement Institute® survey reveals that 67 percent of older adults plan to use or currently use Medicare and 63 percent plan to use or currently use Social Security to pay for their health care costs in retirement. The online survey conducted by The Harris Poll of 1,007 adults over 50 with a household income of at least $150,000 also finds future retirees plan to access a wider array of resources like Medicare to cover health care costs in retirement than current retirees do (71 percent vs. 59 percent).

Government programs needed, but not fully understood

With nearly nine in 10 older adults (86 percent) enrolled in – or planning to enroll in – Medicare, it’s clear Americans acknowledge the need for health care coverage in retirement. Yet more than seven in 10 (72 percent) wish they better understood Medicare coverage, indicating they don’t fully know what they’re signing up for.

The misconceptions vary:

  • 53 percent do not know that Medicare Part B is not free even if you have worked and paid Social Security taxes for at least 10 years
  • 23 percent do not know you cannot enroll in Medicare at any time
  • 29 percent do not know Medicare does not cost the same for everyone
  • 62 percent do not know that future changes will impact the ability to sign up for Medigap/Medicare supplement plans

“With changes coming to Medicare, premiums will increase for high-income retirees, making it even more important for future retirees to understand the details and incorporate the program as part of a comprehensive retirement plan,” said John Carter, president of retirement plans for Nationwide.

In addition, among older affluent adults with children, 42 percent admit they would give away all their money to their children so they could be eligible for Medicaid-funded long-term care.

“Affluent adults should not be planning to rely on Medicaid,” Carter said. “Not only is the program not designed for them, they lose personal control when it comes to long-term care.”

Read more at PRNewswire.