Rising Healthcare Costs Impact Insured Americans' Care and Retirement Plans

A recent study by the Nationwide Retirement Institute highlights that rising healthcare costs are causing insured Americans to delay or forgo necessary medical care, including preventive services such as dental cleanings, vision tests, specialist visits, and mental health care. Nearly 37% of insured adults avoided medical care when sick due to costs; 41% skipped appointments in the last year, signaling a significant impact on long-term health and financial outcomes. Healthcare premiums continue to increase, with projections indicating a 5% rise in single coverage and a 6% rise in family coverage for 2025. The upcoming expiration of temporary Affordable Care Act tax credits may exacerbate premium hikes. Combined with escalating out-of-pocket expenses, insured individuals face a substantial financial burden from both premium and unexpected medical costs. The survey also reveals that 18% of respondents have resorted to medical debt or credit cards to manage healthcare expenses, and 31% are unable to afford an unplanned $500 medical bill. High-cost specialty medications add further strain, contributing to difficulties in managing ongoing healthcare costs effectively. This financial pressure is influencing Americans' retirement planning, with 73% identifying health expenses as a primary concern. Over half report diminished capacity to save due to medical costs, and 68% fear a major health event could jeopardize their retirement finances. Nonetheless, there is a lack of preparedness: a majority cannot accurately budget for retirement healthcare, estimate lifetime costs, or have a comprehensive savings plan. Additionally, many lack clear understanding of Medicare coverage, particularly regarding long-term care. Engagement with financial professionals significantly improves knowledge and confidence about Medicare and healthcare budgeting, although over half of clients have not received guidance on optimal timing for Medicare enrollment. The findings underscore the critical role financial advisors can play in integrating health and wealth planning by assisting clients in budgeting for medical care, anticipating healthcare expenses, and navigating complex Medicare decisions, which is paramount in mitigating risks to retirement security.