Health care costs can have a major impact on economic security in retirement. Medicare provides coverage to virtually all Americans age 65 and older, but gaps in coverage put older adults at risk. Medicare does not cover the high costs of extensive care in a nursing homes, assisted living facilities, or at home. Traditional Medicare includes neither a cap on out-of-pocket expenses, nor coverage for dental, vision, or hearing. Medicare Part D has helped reduce the cost of medications, but even so, many older Americans incur significant out-of-pocket costs for their prescriptions drugs. Our analysis, based on several studies, finds older adults paying more than younger adults for health as a share of household budgets, with health care costs consuming a significant and rising share of Social Security and total income. This presentation will synthesize research that documents these concerns, and discuss related issues and policy options.
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