While the long-term effects of COVID-19 on US healthcare costs have only just begun to emerge, experts estimate that healthcare costs linked to the pandemic could climb into the hundreds of billions in the coming years. Not only does this put more pressure on a system that was already strained due to rising costs long before the pandemic, but can have a significant impact on how much you can expect to pay for future healthcare costs.
How COVID-19 increases healthcare costs
A recent study from Kaiser Family Foundation found that many insurance companies expect health care costs to increase this year due to estimated demand for deferred care, direct costs related to COVID-19 testing and treatment and vaccination costs. A separate report from McKinsey & Company indicates that although the direct effect of COVID-19 has already been significant, additional layers of delayed or indirect impact could potentially dwarf the immediate effects, resulting in $ 125 billion to $ 200 billion in annual US healthcare costs. According to the report, for example, the average cost of treating a patient with chronic obstructive pulmonary disease has the potential to increase by between 7% and 11%, from about $ 38,000 per patient per year to about $ 4,000,000 per patient per year. This increased cost is largely driven by an expected increase in the severity of a patient’s symptoms due to deferred care.
Behavioral health is another problem. In August CDC found that anxiety symptoms had tripled and depression symptoms had quadrupled among 5,470 adults examined compared to a sample from 2019. Similar, Scientific America reported that two separate national studies conducted by researchers at the Boston University (BU) School of Public Health and Johns Hopkins University found that the incidence of depressive symptoms (BU) and “severe mental distress” (Hopkins) was three times the level measured in 2018. In the BU study, these rates were higher than those seen after other large-scale traumas such as 11 Septemberth and Hurricane Katrina.
What can you expect to pay for retirement care?
Healthcare is among the most underestimated but still significant expenses that most people will face in retirement. While Medicare pays part of the costs for people 65 and older, it does not pay for everything. In most cases, this includes dental and vision coverage, which must be purchased separately, and includes long-term care costs. It is actually calculated that the average couple will need $ 295,000 in current dollars for health care costs in retirement, excluding long-term care. This makes pensioners one of the most vulnerable populations when it comes to rising healthcare costs.
Longevity also plays a role. While advances in medical care and treatment have led to longer average life expectancies, longer life expectancy also means that more people may need long-term care at some point in their lives. According to 17th Annual Genworth Cost of Care Survey, every day until 2030, 10,000 Baby Boomers will turn 65 and 7 out of 10 will require long-term care, which can increase significantly to their estimated health care costs without a pension. Between 2004 and 2020, the cost of care services in healthcare increased on average from 1.88% to 3.80% per year. That’s an increase of $ 797 per year for home care and up to $ 2542 per year for a private room in a nursing home. Genworth reports that at this rate, certain healthcare costs exceed US inflation of 1.8%.For one year (from December 2020), the annual national median cost of care increased as follows:
- Assistive technology facility prices increased by 6.15% to $ 51,600 per year.
- Homemaker servicesincreased by 4.44% to an annual median cost of $ 53,768
- Home health assistant services, which include “practical” personal assistance with activities such as bathing, dressing and eating, increased 4.35% to $ 54,912.
- Competent care facility costs rose to $ 93,075 for a semi-private room, an increase of 3.24%, while the cost of a private room in a nursing home increased by 3.57% to $ 105,850.
In a supplementary study on Driving forces for the cost of care, Genworth looked at the effects of the COVID-19 pandemic on rising long-term care costs. They found that increasing demand and strained supply were driving up costs, with 92% of respondents citing growing demand for home services and 54% citing a shortage of skilled labor as the main drivers of rising prices. As COVID-19 intensified supply and demand between 2020, 53% of home care providers reported serving more customers than the year before. As healthcare facilities and household providers struggle to attract and retain qualified employees, 62% of survey participants say they expect costs to increase over the next six months and 43% expect these costs to increase by more than 5%.
How will you pay for retirement care?
Whether you are worried about how you will pay for rising health care costs in retirement or are trying to help manage the cost of care for a parent or loved one, it pays to plan early. Take the time to meet with an independent financial advisor who can help you develop a comprehensive strategy that takes into account important pension risk factors, such as life expectancy, rising healthcare costs and long-term care.
In many cases, long-term care insurance products can help protect against rising healthcare costs. Long-term care insurance is designed to provide coverage if you become chronically ill and may be an option for some individuals and couples who want to transfer some of the financial risk associated with these costs. However, long-term insurance is not a solution for everyone. Policies and coverage differ greatly from one supplier to another, so it is important to read all insurance policies carefully before you buy, to learn about any exceptions, limitations and waiting times. It is also important to compare benefits and providers before deciding if long-term care insurance is right for you. Since your age, your current health, existing medical conditions, and family medical history all play a role in determining annual coverage premiums, the best time to look into long-term care insurance is when you are still in relatively good health and less likely to be denied coverage.
Your advisor can help you evaluate different strategies to ensure that you can pay for both expected and unexpected healthcare costs in retirement. Whether you are confident in your ability to generate income for another 20, 30 or more years in retirement, or are concerned about how long your income may be, you can work with an independent advisor to gain a better understanding of how to do so. most of this exciting period in your life. To learn more, download our free guide, Lives in retirement.
More Tags We LoveHome warranties in arizona Home contractors tampa Credit card loan emi calculator Where To Get Auto Insurance Quotes Cyber security training for employees Savings account Credit fix solutions 2 bedroom apartments san diego Online high schools in pa Online colleges for secondary education