Healthcare for Retirees

Retiree healthcare costs have taken a back seat to the escalation of costs for active employees. And though a 2015 report from the Kaiser Family Foundation shows 23% of employers with at least 200 employees offered retiree healthcare coverage (down from 32% in 2005 and 66% in 1988), my sense is that these costs have become less of an issue.

As the HMO generation moves into retirement with a shift to Medicare Part C HMO products and as large employers move to private exchanges for retirees funded by HRAs, the grumbling has stopped. Costs are more affordable.

And the cost trends of end-of-life care not covered by medical insurance have also lessened. The free market is working on ensuring affordability. A recent Genworth study reports that five-year annual growth rates are increasing anywhere from 1-4%, with average costs across the USA in 2016 as follows:

  • Homemaker Services: $45,760
  • Home Health Aide: $46,332
  • Adult Day Care: $17,680
  • Assisted Living Facility: $43,539
  • Nursing Home (semi-private room): $82,125
  • Nursing Home (private room): $92,378

There is a lot of variability in different regions, so if you are thinking about retirement, Genworth’s calculator can help you pick the region which meets your budget. The government doesn’t screw everything up. But hopefully our politicians keep their hands off this. They have a lot to fix in the non-senior market.

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