Survey Reveals Rising Healthcare Costs Impact on Insured Americans and Retirement Planning

A recent survey by the Nationwide Retirement Institute reveals that rising medical costs are compelling a significant portion of insured Americans to delay or avoid necessary healthcare. Approximately 37% of insured adults report avoiding care when ill because of cost, while 41% have missed healthcare appointments in the past year. This trend largely stems from increasing out-of-pocket expenses and the rising cost of insurance premiums, which are expected to climb 5% for single coverage and 6% for family plans in 2025, amid the expiration of temporary ACA tax credits. Preventative care, crucial for early detection and intervention, is among the services being postponed or canceled, heightening the risk for adverse health outcomes and higher future costs, especially impacting retirement planning. The survey also highlights the growing financial strain from high-cost medications, such as GLP-1 drugs, with patients facing substantial out-of-pocket payments due to coverage limitations. This imbalance between rising premiums and insufficient coverage places consumers in a vulnerable position financially. Concerns extend beyond immediate healthcare costs, as Americans face extended retirement periods requiring sustained healthcare financing. Yet, knowledge gaps exist about applicable safety net programs; for instance, many respondents are unaware that Medicare typically does not cover long-term care, leading to potential unexpected expenses. The average Medicare knowledge score among respondents was below 50%, underscoring the need for improved education on benefit limitations. Engagement with financial professionals appears to enhance preparedness, with those working with advisors demonstrating greater understanding of Medicare and health care cost planning. Despite this, a significant portion of the population remains uninformed, indicating an opportunity for financial advisors to provide critical guidance in aligning health and financial plans. Nationwide supports financial professionals through tools like its Health Care Cost Assessment, which integrates health risk analysis with actuarial data to forecast medical and long-term care costs. This initiative aims to help advisors assist clients in budgeting for routine and unexpected health expenses, thereby mitigating retirement financial risks. The evolving healthcare cost environment necessitates proactive strategic planning to balance insurance premiums, out-of-pocket costs, and long-term care needs, reinforcing the importance of informed, advisor-led financial planning in the insurance and retirement sectors.