While there are several options for seniors' health care, most Americans 65 or older are eligible for, and covered by, Medicare.
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The United States spends twice as much on health care as the rest of world’s developed nations. In fact, 18% of our gross domestic product (GDP) each year goes to support the country’s health care systems. The percentage of the U.S. economy spent on health care for individuals ages 65 and older exceeds 5% — a proportion that is expected to double by 2030 and triple by 2050.
As seniors age, they may struggle to afford soaring health care costs – just as their income is shrinking. According to a recent study by the Employee Benefit Research Institute (ERBI), a U.S. couple retiring in 2017 at age 65, needed $280,000 of savings to cover future medical costs. The $280,000 includes premiums for Part B doctor coverage and Part D drug coverage. It does not include long-term care or a-sisted living.
The overwhelming majority of senior health care, however, is not paid for by seniors but by private insurers and government programs like Medicare, Medicaid and the Veterans Administration. These private and public programs pay for most of the doctors, hospitals, a-sisted living facilities, nursing homes, prescription drugs and end-of-life care utilized by American’s approximately 40.3 million seniors, who make up 13.4 % of the population.
Medicare is the federal health insurance program for seniors older than 65, who have worked full time for at least 10 years. Medicare is paid for by a combination of a mandatory 2.9 % payroll tax a-sessed to all workers and employers, monthly premiums paid by enrollees, and by the government. (As of January 2013, an additional 0.9 % tax is a-sessed on individuals whose incomes exceed certain thresholds: $250,000 when married and filing jointly, and $200,000 for single filers.)
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