Retired boomers "surprised" at the cost of healthcare

A new survey, conducted by Bankers Life and Casualty Company Center for a Secure Retirement, asked 300 retirees between ages 55 to 75 with an annual household income between $25,000 and $75,000, a variety of open-ended questions about what they have learned since they stopped working and what challenges they have faced.

Many retirees say their health itself had become a challenge.  While some felt their health had improved since leaving the workforce, nearly one in five (18 percent) said they had dealt with unexpected health issues.

The high costs of medical expenses were also a big issue.  When asked what costs more in retirement than they thought it would, more than half (55 percent) of respondents indicated that healthcare is costing them more than anticipated.  And if given the opportunity to go back in time, retirees say they would make saving for their healthcare costs a much bigger priority.

While many have experienced increased costs in every aspect of life, here’s a look at the top five expenses that were higher than expected among America’s retirees:

•   Healthcare – 55%
•   Groceries – 41%
•   Car/Transportation – 38%
•   Prescription Drugs – 33%
•   Utilities – 22%

Retirees polled had many goals beyond the stereotypical ideas of retiring to Florida, seeing their grandchildren and traveling the world.  When asked what goal they hope to accomplish in the next three years, more than one in three (36 percent) have a personal goal that focuses on their health and wellness.  While some people wanted to travel, many retirees wanted to be in better health (21 percent) or lose weight and be more physically fit (15 percent).

“Many times when people think about retirement planning, they only think about money,” said Chris Campbell, vice president of marketing and business development at Bankers Life and Casualty Company, a national life and health insurer.  “While that is important, don’t over look your health.  Living a healthy lifestyle keeps healthcare costs down and the ability to fully enjoy your retirement years.”

Here’s a look at the top five goals today’s retirees hope to accomplish in the next three years:

1.  Travel 
2.  Maintain or Improve Health
3. Lose Weight/Get Physically Fit
4.  Home Improvements
5.  Spend More Time with Family

The Bankers Life and Casualty Company Center for a Secure Retirement’s survey series Listening to Middle-Income Americans was conducted in April 2012 by the independent research firm The Blackstone Group. Excerpts from the report can be viewed at www.CenterForASecureRetirement.com

A nationwide sample of 300 retirees ages 55 to 75 who have an annual household income of between $25,000 and $75,000 participated in the Internet-based survey.  Significant sub-sample differences were tested at the 95% confidence levels.

The Bankers Life and Casualty Company Center for a Secure Retirement studies and consumer awareness campaigns provide insight and practical advice for how everyday Americans can achieve financial security during retirement.

Established in 1879 in Chicago, Bankers Life and Casualty Company focuses on the insurance needs of the retirement market.

Do you know what Medicare covers?

A significant number of retirees on Medicare lack a solid understanding of the health insurance program’s coverage and costs. Two out of three, for example, did not know if Medicare covers long-term care. This lack of knowledge results in unexpected financial surprises, according to research by the Bankers Life and Casualty Company Center for a Secure Retirement.

The study, Retirement Healthcare for Middle-Income Americans, focused on 400 pre-Medicare Baby Boomers (age 47 to 64) and 400 senior citizens (age 65 to 75) with an annual household income of between $25,000 and $75,000.

It found that one in three Medicare enrollees still did not know how much the program covers for doctor's visits (33 percent) or hospitalization (31 percent), which are the basic components of the program's health benefits.
The CSR study also found nearly half (49 percent) do not understand their benefits for vision care and hearing care, both which are services typically not covered by Medicare.
Long-term care was found to be the least understood and the greatest perceived threat to financial security for middle-income Americans. Two out of three (66 percent) Medicare recipients did not know if the program covers long-term care or overestimate its long-term care coverage.

Medicare has long been labeled as an entitlement program but middle-income Americans say it is not the free ride many assume it is. Two-thirds (65 percent) of those on Medicare report paying the same or more for healthcare now that they are on Medicare, resulting in unexpected financial surprises.
The most common financial surprises for Medicare enrollees is the cost of monthly Part B premiums with nearly half (44 percent) who report paying more than they had expected.
The unexpected financial surprises coupled with the uneasy economy have forced 78 percent of middle-income Americans on Medicare to take at least one action to reduce their healthcare expenses, including -
● switching to generic prescriptions (69 percent),
● holding off going to the doctor (22 percent),
● changing to a less expensive health plan (15 percent) or
● splitting pills to make their prescriptions last longer (12 percent).

"Financial fallout from healthcare related expenses can devastate savings and strip away the enjoyment of one's retirement years," said Chris Campbell, vice president of strategic marketing and business development for Bankers Life and Casualty Company, a national life and health insurer.

"Review your Medicare plan options annually and look into new health and prescription drug plans that better meet your needs. Also, consider purchasing additional healthcare insurance to address services not covered by Medicare and