The latest brief from Center for Retirement Research at Boston College found that retirees in good health face higher lifetime health care costs than those in poor health.
According to the study, a typical healthy couple at age 65 can expect to spend $260,000 with a 5-percent risk of exceeding $570,000. A typical unhealthy couple can expect to spend $220,000 with a 5-percent risk of exceeding $465,000. Those in good health live longer, eventually become less healthy, and often need nursing home care. So the healthy who delay buying Medigap or long-term care insurance could face much higher premiums later.
“This counterintuitive finding suggests that those currently in good health would be unwise to assume that they will enjoy lower-than-average health costs throughout their retirement,” says CRR director Alicia Munnell.
The brief explains this somewhat counterintuitive finding. Underwritten by Prudential, the CRR research found three reasons the healthy may incur higher health care costs than sick people over a lifetime:
- Those in good health can expect to live much longer, so are at risk of incurring health care costs over more years.
- Many who are currently free of chronic disease will eventually succumb to one or more of them.
- Those in healthy households face a higher lifetime risk of requiring nursing home or long-term care than the unhealthy. They are more likely to get to an advanced old age, which is when the risk of requiring such case is greatest.
To read a copy of the brief, click here.