Healthcare costs

[moretolife]

Hi everyone, I am new to the board - just posted an introduction. A question that I have that I have not seen discussed relates to uninsured healthcare costs. The healthcare discussion that I read has centered on insurance issues.

Because of my husband's health issues, we currently spend about $6,000 annually after health insurance. At this time, I am planning the same amount (adjusted for inflation) for the future. For those of you planning to live on $30,000 - $40,000 after you retire, that is a huge chunk of your annual spending.

My question is this: how do you estimate future, uninsured healthcare costs?

[Martha]

Is the $6000 the amount a year you end up paying after insurance pays the rest? Does your insurance have a maximum out of pocket, after which you will no longer have to pay anything?

For example, our insurance at work has a $3000 maximum out of pocket, after which it pays 100% of our costs, except for copays on drugs. If there is no maximum out of pocket amount, then you will have to use your best estimate. You might want to factor into your analysis that healthcare inflation has been running well over general inflation figures over the last several years (some estimates show healthcare inflation running at about 11%). Who knows to what extent or for how long that will continue. Also, you will have to consider your own situation and the likelihood your husband will incur similar medical costs in the future.

EDIT: If you are into pretty dry reading, here is the Bureau of Labor Statistics 2004 report on health care cost trends: http://www.bls.gov/opub/mlr/2004/11/art5exc.htm

The link is to the abstract only; in the abstract there is a pdf link to the full report.

[moretolife]

Our insurance also has a maximum coinsurance for labs, doctor's visits, etc. But it does not have a maximum amount for prescriptions. Most of the $6,000 is for prescriptions. My husband has had organ transplants and has a bad heart(Diabetes for 30+ years). Between Medicare and our insurance the immunosuppressant drugs are covered. It is the heart drugs that are so costly. That included new glasses for both of us and 4 road trips for medical services. For the coming year, I was able to budget less because we should not need new glasses for 2006. But I see this cost gradually increasing as we get older. So my retirement plan includes $6,000.

When my mother-in-law developed cancer, the cost of chemotherapy and related drugs averaged about $2,000 month.

My question was raised, in part, because several people have posted about budgeting for health insurance but I haven't seen anything about budgeting for the costs that are not covered by health insurance or Medicare. A serious illness could quickly wipe out life savings.

I don't want to end this post on a negative note, so ... we just bought a travel trailer to spend summers at the lake and my budget for travel exceeds my budget for medical costs.