Once again, the Employee Benefit Research Institute (EBRI) brings you health economics news to keep you awake at night.

In the EBRI’s latest Issue Brief, Savings Needed to Fund Health Insurance and Health Care Expenses in Retirement: Findings from a Simulation Model, you will learn all you need to know, and more, about how much more you’ll have to save if you’re a Boomer looking to retire about ten years from now.

The bottom-line: you probably don’t have near enough saved to cover health care. And these numbers do not factor in long-term care.

In the table here, I’ve compared the savings needed for health in retirement in 2008 to those forecasted for 2018 from the EBRI financial model. These are both based on retirement at age 65, and compare savings required for people whose benefits are subsidized by employers as well as those without any employer subsidy.

Women, listen up: your costs could be as high as $654,000 depending if you have employer-based benefits that will be subsidized, as well as your health status.


Health Populi’s Hot Points: I’m in Detroit for a couple of days talking with a health plan and some of the state’s largest employers about the future of health care. The great Motown’s Four Tops’ hit comes to mind, “It’s the Same Old Song.” I’ve been talking about EBRI’s data on health costs in retirement for many years, and in this blog over the past nine months in September 2007, October 2007, and April 2008 when I talked about EBRI’s Retirement Confidence Survey.


What’s different with the publication of the May Issue Brief is the current political-economic environment: Americans are finally feeling something like the price pinch of petrol that our friends in Brazil, Taiwan, Thailand and India feel, as the Economist’s chart on the left illustrates. But things can get even more dire: look at what Germans and Brits pay for gas.

In just the past six months, Americans have become very concerned about the economy, which is now Issue #1 for November’s elections.

The EBRI retirement health cost data provides the impetus that will drive people to remain in the workforce longer.

And, to demand that GM and Ford build more gas-efficient cars, and even better — cars that run on alternative fuels.

Perhaps not the same old song, after all.