The 5 Most Costly Retiree Medical Conditions

Find out how much treating heart disease or osteoarthritis will cost you in retirement.

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Health care is likely to be one of your biggest retirement expenses. Almost one-third of all health care expenditures are for medical treatment for the elderly, totaling $368.1 billion in 2008. The bulk of this spending is on just five medical conditions, according to a new report by the Agency for Healthcare Research and Quality in Rockville, Md. Some 86 percent of the nation’s 40 million seniors were treated for at least one of the five most costly conditions in 2008. Medicare pays for the majority of these health care expenditures, but all of them also have some out-of-pocket costs. Here’s a look at how much it costs to treat these common retiree medical conditions.

[See 10 Essential Sources of Retirement Income.]

1. Heart conditions. A total of $48.4 billion was spent to treat heart conditions among 12.7 million adults age 65 and older in 2008, the highest cost of any medical condition. The average expenditure for heart conditions was $3,820 per person. Medicare paid 67.5 percent of the costs for the treatment of heart conditions. Individuals paid for 5.8 percent of these health care bills out-of-pocket, and private insurance companies contributed 15.5 percent.

2. Cancer. Treating 8 million older adults for cancer cost $32.2 billion, averaging $4,028 per person. Medicare covered 63.5 percent of these cancer-related costs, while patients and families paid for 6 percent, and private insurance covered 21.7 percent.

[See How to Get Retiree Health Insurance Before 65.]

3. Osteoarthritis and non-traumatic joint disorders. Some 13.4 million retirees are treating their osteoarthritis and other non-traumatic joint disorders at a cost of $24.8 billion, or about $1,856 per person. The federal insurance program pays about 60 percent of these medical costs, while individuals and private insurance companies each pay just under 11 percent of the bills.

4. Hypertension. Hypertension is the most widely reported condition among people age 65 and older, impacting 23.8 million people. But this condition has the lowest average per-person expenditure of the top five conditions, averaging $1,002 per person and $23.8 billion overall. Medicare covered only about half (55.2 percent) of the costs for the treatment of hypertension. Retirees generally paid 16.7 percent of these medical expenses themselves, the highest share of out-of-pocket payments of any of the top five conditions.

[See How to Prevent Outliving Your Retirement Savings.]

5. Trauma-related disorders. It costs an average of $3,742 per person to treat 5.5 million seniors for trauma-related disorders. Medicare paid more than three-quarters (78.2 percent) of the $20.5 billion worth of medical bills, which was the highest share paid among the top five most expensive conditions. Retirees paid 4.3 percent of the costs out-of-pocket.

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