At a Glance | October 22, 2018 Retirees Need More Savings for Expenses Not Covered by Medicare 1 Payment Sources for Incurred Health Care Expenses PAYMENT SOURCES 2015 Medicare was not designed to cover health care expenses 60% 40% in full. EBRI estimates that Covered by Medicare Not covered in 2015, Medicare covered just 60% of expenses Out-of-Pocket: 12% for noninstitutionalized Private Insurance: 15% beneficiaries aged 65 and up. Medicaid: 4% VA: 3% Other: 6% 2 SAVINGS TARGETS Savings Needed for Premiums and Out-of-Pocket Drug Expenses 2011–2018 Individuals should be concerned about saving for Prescription Drug Women’s Savings Targets health insurance premiums 3 Needs and out-of-pocket expenses. $221k $217k $210k $198k $195k High 90% Chance $187k $185k $176k of Having In the future, retirees will likely $161k Enough Savings $156k Median $154k have to cover more of their $147k $143k $139k $140k $131k health costs because of $138k 50% Chance $135k High $132k the financial condition of the $129k $124k $124k $120k of Having $114k Median Medicare program. The Enough Savings $99k $95k $95k $93k $93k $89k $86k $83k percentage of private-sector establishments offering retiree health benefits has been 46+44+41+38+40+41+43+45 74+70+65+59+62+62+66+7246+44+41+38+40+41+43+4552+51+46+44+47+48+49+5432+31+29+28+30+31+32+3374+70+65+59+62+62+66+7232+31+29+28+30+31+32+3346+44+41+38+40+41+43+4552+51+46+44+47+48+49+5474+70+65+59+62+62+66+72 2011 2012 2013 2014 2015 2016 2017 2018 falling. This is also true in the public sector. Prescription Drug Men’s Savings Targets 3 Needs $194k $191k $185k $177k $172k High 90% Chance $168k $164k $156k of Having $148k $136k $135k Median Enough Savings $131k $127k $122k $124k $116k $106k High 50% Chance $103k $102k $100k $97k $96k $93k $88k Median of Having $75k $71k $72k $73k $70k $68k Enough Savings $65k $64k 35+34+32+29+31+32+33+34 24+23+22+21+23+24+24+2545+45+41+39+41+42+44+4965+62+57+52+55+56+59+6445+45+41+39+41+42+44+4935+34+32+29+31+32+33+3465+62+57+52+55+56+59+6424+23+22+21+23+24+24+2565+62+57+52+55+56+59+6435+34+32+29+31+32+33+34 2011 2012 2013 2014 2015 2016 2017 2018 1. EBRI estimates from the 2015 Medical Expenditure Panel Survey. 2. Author simulations based on assumptions described in EBRI Issue Brief, No. 460. 3. Prescription drug needs were evaluated at a “high” level such that retirees were at the 90th percentile of prescription drug expenses throughout retirement, and they were evaluated at the median level. © 2018 EBRI