When a person is in their later years, one thing that can be a major source of costs for them is health care. There are many different types of health care costs an elderly individual can face.
Some of these costs are recurring costs, like prescription drug costs and the costs of doctor visits. Others are non-recurring costs related to special or unexpected medical events, such as costs for a brief overnight nursing home stay or costs for a hospital stay.
There are some government programs, such as Medicare, that elderly individuals may be able to receive assistance from when it comes to covering medical costs. These programs, do, however, have limitations. For one, they generally have very strict and complex eligibility requirements. Also, they do not cover all types of health care costs.
Thus, individuals can end up facing quite a bit in the way of out-of-pocket health care expenses in their elderly years. A recent analysis estimated that the average yearly per-household out-of-pocket health care expense total is:
$4,383 for households between the ages of 65 and 74.
$6,603 for households that are 85 years of age or older.
Given the major health care costs, a person can face when they are a senior, planning in advance for such costs can be important. In care planning, it can be very important to think about all potential future health care costs, including more predictable costs like recurring costs and less predictable costs like non-recurring costs. Elder law attorneys can help individuals understand what sorts of things they should take into account when care cost planning and can explain to them what sorts of estate planning devices and other mechanisms can be helpful in care cost planning.
Source: USA Today, “How much will health care cost in retirement?,” Eric McWhinnie, March 14, 2015