The future of Medicare is increasingly weighing on the minds of Americans, with 63% concerned that it will not be there when they need it, according to a new study.
The possibility of Medicare running out of money was the biggest retirement planning stressor for 20% of respondents to the annual Nationwide Retirement Institute Health Care Costs in Retirement survey.
As fears about the long-term solvency of Medicare increase, many respondents said reforms are needed. The top health care priority for the next administration should be ensuring Medicare’s stability, according to 42% who took the survey. That’s slightly less than the 43% who called for lowering out-of-pocket health care costs and the 43% who prioritized lowering prescription drug prices. The survey authors noted there is bipartisan support for reform, with 47% of Democrats and 43% of Republicans prioritizing Medicare’s stability, and 47% of Democrats and 44% of Republicans calling for lower prescription drug prices.
“Concerns about the future of Medicare are adding another layer of uncertainty for Americans as they consider how they’ll manage health care costs in retirement,” said Kristi Martin Rodriguez, senior vice president of the Nationwide Retirement Institute, in a news release. “With high living costs already squeezing household budgets, many are worried about having enough saved to cover their long-term health care. Given the current pressures and potential for future health care cost increases, it is never too early to begin planning for health care expenses in retirement.”
High costs are a serious impediment for many who are trying to build a solid financial safety net, with rising health care expenses increasing their concerns and financial stress, the survey found. For example:
67% worried a single major health care problem could ruin their finances for years to come.
49% said medical and health expenses have sharply reduced how much they have saved or will be able to save for retirement.
44% said they could not pay off an unexpected $5,000 health care out-of-pocket expense.
25% have canceled in the past 12 months or are considering cancelling or postponing an annual physical this year because of high inflation.
Many survey respondents expressed positive views about artificial intelligence, with 53% expecting AI to enhance the quality of health care, 45% saying it will discover cures for chronic conditions that they may develop in the future, and 33% believing that AI could extend their life expectancy. Those who expect AI will add to their lifespans expect it will add approximately 10 years on average.
Progress in extending lives has generated concerns, however, with 62% of Americans worrying about living for a long-time and running out of money in retirement. To prepare for this possibility, 18% of respondents said they plan to update their retirement plans to accommodate longer lifespans.
