Posted on 31 March 2011
By Mark Miller
Fidelity Investments says the cost of healthcare in retirement is falling for the first time since the company began tracking health spending ten years ago — and the new healthcare reform law is getting the credit.
Fidelity estimates that a 65-year-old couple retiring this year will need $230,000 to pay for medical expenses throughout retirement, not including nursing-home care. That represents an eight percent decline from last year, when the estimate was $250,000 and the spending forecast jumped 4.2 percent.
The drop in this year’s forecast stems from changes to the Medicare prescription drug program contained in the Affordable Care Act (ACA) that reduce out-of-pocket spending by seniors. The law gradually closes the notorious “doughnut hole,” which is the gap in coverage that starts when a drug plan beneficiary’s annual drug costs hit $2,830 and continues up to $4,550, when “catastrophic” coverage kicks in.