Major Surgery on Boomers' Savings

Walter Cronkite once stated, “America's health care system is neither caring, nor a system. No one knows this more than today’s baby boomers. Between 2001 and 2007, the share of bankruptcies attributable to medical problems rose by 49.6 percent and according to a report released today, Friday, October 2, 2009, by the American Bankruptcy Institute (ABI), there have now been 1.046 million personal bankruptcies since the start of the year. The biggest single cause of personal bankruptcy is medical bills. According to a survey done by Merrill Lynch in 2005, boomers were three times more worried about getting a major illness (48%), their ability to pay for health insurance (53%) or having to go to a nursing home (48%), than they were of dying (17%).

According to Senior Magazine, (http://www.seniorlvgmag.com/), what worries older workers about the current healthcare system, is a lack of confidence in healthcare coverage among older workers and their spouses. Older workers and their spouses with low and moderate incomes are worried about the affordability of healthcare insurance coverage: over half of older workers with incomes below $40,000 and two of five (42%) with incomes between $40,000 and $60,000 said they were “very worried” about being able to afford healthcare insurance and for good reason. Out-of-pocket costs for healthcare and healthcare insurance premiums take a large bite out of the household incomes of older workers. 50 to 55% of older adults in households with incomes under $40,000 spent 5% or more of their income on out-of-pocket healthcare costs and premiums, and more than one-third spent 10% or more. What's worse is that medical expenses are on the rise. According to an annual study by Hewitt Associates, in 2010, the combined average premium and out-of-pocket costs for health care coverage for a worker are projected to climb to $4,023 a year, a 10 percent increase from this year. http://www.chicagotribune.com/business/chi-mon-health-costs-hewitt-0928sep28,0,7654162.story?track=rss

The odds of baby boomers avoiding health issues are not in their favor. Over 60% of adults ages 50 to 64 who are working (or have a working spouse) have been diagnosed with at least one chronic health condition, such as arthritis, cancer, diabetes, heart disease, high cholesterol, or high blood pressure, according to a report from The Commonwealth Fund. The report also says that one-fifth of older workers and their spouses -- 7 million Americans -- either have no healthcare insurance or have been uninsured at some time since age 50. The report raises alarms about the ability of the U.S. healthcare system to cope with the future healthcare needs of the aging, low, and middle income baby boomers, who face increasing healthcare issues, unstable healthcare insurance coverage, high medical costs, and debt problems.