Health care costs that aren’t reported in many surveys and studies add up to billions. Costs beyond co-payments and deductibles add up, and those costs have hardly diminished since the passage of health care reform laws last year. As the baby boomers are crossing the threshold into retirement, these costs could increase.
Caring for family and friends can cost workers
A recent study by the Deloitte Center for Health Solutions found that unreported costs of health care add up to an estimated $363 billion per year for Americans, according to CNN. The “hidden costs” include alternative therapies and treatments, ambulance services and prescription drugs not covered by health insurance plans, among other things. However, one of the biggest costs is providing care and supervision to loved ones, such as the elderly and the disabled. The study estimates that the cost of providing unpaid home care came with a price tag of nearly $200 billion, as the average person who took time off from work to care for a loved one lost $12.60 an hour, on average. Additional health care expenses are estimated at $1,355 per year.
Elderly facing greater burden
Compounding the rise of health care expenditures and costs above the rate of inflation is the growing population of the elderly. The Centers for Medicare and Medicaid Services, part of the U.S. Department of Health and Human Services, projects that the number of people 65 or older will rise in the next decade, increasing from a projected 40.8 million in 2011 to 50 million by 2018. The elderly pay a steep price for increasingly expensive health care; bankruptcies among people 65 to 74 rose by 178 percent between 1991 and 2007, according to Fox News. Health care expenses have risen by 56 percent since 2002 for retirees, with an average $535 per month expenditure on health care. The only thing that the elderly are estimated to spend more money on than health care is food.
Here come the Baby Boomers
Life expectancy in the United States, according to the Wall Street Journal, has risen to an average 78.2 years — 75.7 years for men and 80.6 years for women. Because the baby boomers are set to start entering retirement, more people will retire and live longer after they do. More people are going to have to provide at home care for their parents and grandparents, spend more out of pocket and miss more work opportunities to do so. The cost of health care is likely to keep rising.