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Devaluation of life: Medical care will rise in price for pensioners by 170% in the next 20 years
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Devaluation of life: Medical care will rise in price for pensioners by 170% in the next 20 years

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California – October 9, 2018

Many years of work are behind, the children are grown up, and ahead is a seemingly quiet life in retirement. Many people believe that American retirees live happily ever after, but this is not so. Unfortunately, retirement funds from a life of work are not always enough, which is why many older people leave the country in search of a better, and more affordable life.

The number of Americans who after retirement move to live outside the United States is constantly growing. According to the Bloomberg Health-Care Efficiency Index, for the period from 2010 to 2015, their number increased by 17%. Sociologists predict that by the time of 2017, the percentage increased to 21.3%, that in the next ten years, the percentage may double.

So, on the eve, HealthView Services, a company specializing in forecasting the cost of medical services at retirement, found that over the past year, inflation in the health sector has slowed. However, there is bad news: even at a lower rate of price growth, pensioners will still have to save a lot to provide themselves with medicines and other medical care.

According to the retirement HealthCare Costs Data Report, the company predicts an increase in health care costs for pensioners by an average of 4.2% compared to 5.5% last year. According to HealthView Services, this is primarily due to the slow growth in the cost of prescription drugs.

Nevertheless, medical inflation is still speedier than the rise in the overall price of goods and services across the country. For example, medical expenses for a 65-year-old couple who just retired are $11,752 a year, but in 20 years, when they are 85 years old, this amount will grow to $1,966 -- that is, it will increase by 170% compared to the current one.

Devaluation of life: Medical care will rise in price for pensioners by 170% in the next 20 years

"Every year when we get older, medical costs take more of what we spend out of a permanent income," said Ron Mastrogiovanni, Founder and CEO of HealthView Services.

To the future pensioners have enough money for necessary medical services, HealthView Services advises working Americans already take action to improve health and postpone their savings.Devaluation of life: Medical care will rise in price for pensioners by 170% in the next 20 years

Devaluation of life: Medical care will rise in price for pensioners by 170% in the next 20 years

"More and more coverage is on our shoulders," Mastrogiovanni added.

Devaluation of life: Medical care will rise in price for pensioners by 170% in the next 20 years

Rising health care costs are everywhere in the US

Health spending in the US increased by $900 billion between 1996 and 2013. Americans spend more money on health care than residents of any other country in the world, the Daily Mail writes.

According to the American Medical Association, in 2013, total health care spending in the United States reached $2.1 trillion. In 2017, the figure was 3.2 trillion dollars, which corresponds to 18% of US GDP. It should be noted that the figure is not falling, but rather growing. By the end of 2018, experts believe, the figure will be at least 5.3%.

According to the latest forecasts, the annual growth of medical care costs will be 5.5% on average from 2017 to 2026. It is planned that by 2026 the costs will reach $5.7 trillion.

And it is also worth noting that most of the increase in costs is not related to new diseases, it is related exclusively to the rise in the price of medical services.

Experts say the main reason for such staggering costs is the aging the US population. Other reasons include increasing rates of obesity and increasingly expensive services.

But we'll return to the first aspect: the aging US population. Now let's make a simple and logical conclusion: the US authorities have decided to get rid of the aging population, then to reduce the rise in prices for medical care. You say that's not true? Why not exactly? It is about the cost of Medicaid and Medicare insurance programs. That is, the more people that live longer, the longer the state will have to pay the insurance companies that they themselves have created. It turns out that the authorities have made their choice in favor of those whose are younger, who are now full of energy and ready to work, and the aging population is no longer necessary. The pensioners will not be able to find a good job, and it is really expensive to care for them by the state.

CMS experts also say the number of uninsured Americans is increasing by 2026. The insurance rate is likely to drop to 89.3 from 91.1% in 2016 after Republicans violated Obamacare's individual mandate last year, requiring all adult Americans to purchase health insurance, the report notes.

Health insurance in the United States: Medicaid, Medicare and other medical care costs

On the one hand, the United States has the highest medical costs in the world, produces the best medicines and medical equipment, and the country also has a leading place in the efficiency of scientific research. At the same time, the USA ranks in 50th place in terms of medical care, and in terms of life expectancy, infant and child mortality, and the country is also on the 48th place in the world rankings. Largely such bleak picture of public health was formed due to the fact that until recently nearly 50 million people living in the United States were generally not able to pay for health insurance, and then promptly find a diagnosis and get treatment.

Health insurance in the US is entirely in the hands of private companies. The state takes care only of the most sensitive segments of the population, and even then, as a rule, not in full.

Medicaid insurance is available to low-income people and families, as well as children and pregnant women without insurance. It is issued by the government but through each State separately. The State adds its money to the government, but it costs it expensively: in many States, the cost of Medicaid is the most expensive part of the budget. This insurance is tied to the place of its issuance, and if a person moves to another state, he needs to repeat the whole process of applying to get Medicaid at the new place of residence. As poverty varies from state to state, it can be difficult to receive Medicaid in different parts of America. Many hospitals accept Medicaid, but it is difficult to find a private doctor to recognize this insurance.

Medicare Advantage is accessible to anyone who has reached retirement age (65-years-old) and people with certain medical diseases. This insurance is issued by the state and is valid in any state. It fully covers short-term hospitalization, visits doctors by 80% and gives the right to buy insurance for medicines. However, the elderly are faced with the problem, which is called the 'doughnut hole'. Until they don't spend a certain amount on medicines, insurance won't even work, and patients will not afford treatment. The program is financed by payroll taxes from employees and employers. Most hospitals and doctors accept this insurance.

Also, as it is known, the program is not intended for disabled pensioners who need medicines or medical equipment. But for this category of citizens, there are other programs supported by charity.

Now the program is experiencing difficulties associated with the globally manifested aging of the population when part of people of retirement age increases significantly, and the number of able-bodied population decreases. However, the program is not minimized because of this.

All other citizens who do not fall under the state programs Medicaid and Medicare Advantage receive medical care under health insurance. However, health insurance is not mandatory; you cannot have insurance and pay for treatment out of pocket. Only treatment in the US will cost you too much.

So, returning to the results of a new HealthView Services study, it turns out that health insurance will also increase to 170%. The question is what to do for those who wanted a quiet life after 65, sitting at home watching TV or raising grandchildren. Now pensioners have to think where to get a job and most importantly, how many years they still have to work.

What pensioners should do

At least 400 thousand American pensioners currently live abroad. Most often Americans in retirement choose Canada, Japan, Mexico, Germany, and the UK.

The largest increase in the number of American pensioners from 2010 to 2014 (42%) was recorded in Japan. The reason for the increase in the number of American pensioners in this country can be attributed to the large deployments of the US military there (more than 50 thousand US troops).

American pensioners often explain their move to other countries by the high cost of living at home.

"I think a lot of people leaving for retirement and preserve the health, are interested in is not to reduce the standard of living and see the world," said the Director of the Research Council on pensions in the Wharton School at the University of Pennsylvania, Olivia Mitchell.

For example, in Mexico, you can rent a house that is two times cheaper than the US average, and the warm climate will also significantly reduce the utility cost. In some countries, retirees can even find a cleaner to wash, to cook and to clean. It costs much less than in the US.

But there are also obstacles that must be overcome in order to adapt to life in another country. The most serious barrier to overcome is the foreign language and culture.

Access to medical care can also be a problem. While older people can still receive American benefits and pensions while they work, health insurance is not available to those living abroad.

Author: USA Really