Medical Expenses Have Large Impact on Retiree Incomes, Study Finds
Medical expenses for employees who retire at age 65 without employer-sponsored health insurance and who qualify for Medicare can account for as much as 20% of their pre-retirement incomes, according to a study conducted in June by Hewitt Associates, the Washington Post reports. The study, which surveyed about one million employees at 62 large companies, also found that early retirees without employer-sponsored health insurance likely will have access to only 59% of pre-retirement income after they pay their medical expenses. According to previous studies, retirees must have access to between 85% and 90% of their pre-retirement incomes to maintain their current standard of living. Lori Lucas, director of participant research at Hewitt, called the study a "wake-up call" for employees and said that they "need to anticipate the potential cost of paying for much of their retiree medical themselves" (Crenshaw, Washington Post, 7/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.