Single Seniors Pay More for Health Care

    Single Seniors Pay More for Health Care

    By Shelly Gigante

    Single seniors shell out more for certain health care costs than retired couples – much more.

    Research1 released earlier this year by the nonprofit Employee Benefit Research Institute (EBRI) in Washington, D.C., found older singles and older couples face sharply different out-of-pocket costs for non-recurring health care services, such as home health care, nursing home stays, overnight hospital stays, and outpatient surgery.

    “I was a little surprised at how great the difference is,” said Sudipto Banerjee in an interview, the EBRI research associate who authored the study. “Expenses for singles are quite a bit higher than we see for couples.”

    EBRI analyzed health care spending for both recurring services (doctor and dental visits and prescription drugs) and non-recurring services among single and couple households with an age of 65 years and older over a two-year period.

    Out-of-pocket spending for recurring health care expenses, it found, averaged roughly $2,500 per person for both single and couple households, and generally did not change with age.

    The average total non-recurring expense for singles age 65 and older, however, was $7,122, compared with $3,161 for couples.

    The differences are greatest for nursing home costs and home health care, which suggests couples may benefit from having their spouse or partner available to deliver care.

    “Because the differences are greatest for nursing home costs and home health care, we believe that someone who lives with a spouse or partner is able to reduce their costs because that partner is also working as a caregiver,” said Banerjee. “If you are single, you don’t have that option.”

    Indeed, a 2015 paper2 by researchers at the University of Michigan’s Institute for Social Research found that singles at age 70 face a shorter life span than couples at the same age. Yet, in spite of their shorter life span, the study found that singles are more likely to end up in a nursing home.  

    According to the paper, single men and women face, on average, a 21 percent and 36 percent chance, respectively, of being in a nursing home for an extended stay. The corresponding odds for married individuals are 19 percent and 36 percent.

    Health care costs represent the second largest share of household expenses for older Americans, after home-related expenses, EBRI reports, due largely to longer life expectancies and anticipated annual increases for medical and prescription expenses.

    It is the only expenditure that increases with age, both in absolute dollars and as a share of household expenses.

    EBRI’s new data reveal that the out-of-pocket health care cost discrepancy between singles and couples also gets bigger with age.

    For those ages 65 to 74, the average total non-recurring expenses were $2,790 for singles and $2,024 for couples: a difference of $766.

    The average total non-recurring expenses for seniors ages 75 to 84 were $5,502 and $3,930 for singles and couples, respectively, a difference of $1,572.

    And for the oldest age group, the difference was $4,825 ($13,355 for singles and $8,530 for couples).

    The Health Cost Institute, a nonprofit public interest group in Washington, D.C., estimated in 2013, the most recent year for which data are available, that total health care costs in retirement for those who retire at age 65 and live through age 90 will be $220,6003 for singles and $441,200 for couples. That figure reflects the value of future expected health care costs not paid by Medicare. It does not include long term care costs.

    Fidelity Benefits Consulting, based in Boston, projects4 that couples who are both age 65 and retired in 2015 would need an estimated $245,000 above and beyond their Medicare coverage to pay for health care needs throughout retirement, a 29 percent increase since 2005 when that figure stood at $190,000. That estimate assumes a life expectancy of 85 for a male and 87 for a female and does not include other health-related costs such as long-term care, over-the-counter medications and most dental services.  

    Medical costs are among the most significant barrier to economic well-being for older adults, according to the National Council on Aging (NCOA), a Washington, D.C.-based nonprofit.

    To help defray costs, NCOA spokesperson Vanessa Sink suggests seniors (single or otherwise) take full advantage of programs to keep their healthcare costs under control.

    “If you are eligible, public or private benefits may help pay for your deductible, Medicare Part D premium, or prescription drugs,” she said in an interview. “Some drug companies will also make their medications available at a discount for those who qualify.”

    NCOA offers an online tool to help identify local, state and federal programs for which you may qualify.

    “It can really free up extra money in your budget and while it’s not a lot, it could be enough,” said Sink.

    Older adults can also take advantage of cost saving technologies where possible, according to the American Elder Care Research Organization (AECRO), which operates websites that connect families and caregivers with long term care resources.

    (Seniors should always discuss appropriate treatment options with their physician so they understand the benefits and risks involved.)

    Wearable sensors that allow remote monitoring, tablet computers that enable real-time video chats with caregivers, and medical devices that help manage medications can help some seniors “age in place,” notes AECRO, which reduces the number of care hours they require.

    That can lower healthcare costs dramatically.

    AECRO estimates the use of home care technology might costs roughly $400 per month, compared with $3,192 monthly for full-time (40-hours) home care – a savings of $2,792.5

    Similarly, it suggests seniors who utilize home care technology could save up to $2,100 per month over an assisted living facility.

    “Planning for health care costs should happen long before you retire, but once you retire you live on a fixed income,” said Sink. “There isn’t a place to look to get more money. If you get to a point where your budget is starting to change because health costs are rising or you had to cover costs you weren’t expecting, it’s a good idea to look at your budget again and try to determine whether you may be eligible for financial assistance.”

    More Information

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    How Long Will My Estimated Retirement Savings Last?

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    1 Employee Benefit Research Institute, “Differences in  Out-of-Pocket Health Care Expenses of Older Single and Couple Households,” January 2016

    2 Institute for Social Research, Michigan Retirement Research Center, University of Michigan, “Couples’ and Singles’ Savings After Retirement,” 2015

    3 Health Cost Institute, Health Care Costs — From Birth to Death, 2013

    5 Fidelity Benefits Consulting, Retirement Health Care Cost Estimate, 2015

    6 American Elder Care Research Organization, “Technologies to Reduce Care Costs and Allow Safe Aging at Home,” April 2014