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Published: Dec 07, 2016 5 min read
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A healthy 55-year-old woman on average will pay $79,000 more for health care over her retirement than a 55-year-old man, according to a report released Wednesday by HealthView Services.

Women face a higher health-care tab because they live on average for two years longer than men, not because they consume more health care in a typical year.

When it comes to paying this longevity penalty, women are at a disadvantage: They make less than men during their careers, often take time off for caregiving, and wind up with Social Security that’s about 23% less than men’s on average, according to HealthView Services, which is a Danvers, Mass.-based company that provides retirement health care cost data and tools to financial advisers.

“Women are getting hit,” says Ron Mastrogiovanni, founder and CEO of HealthView Services.

Nearly 75% of all older adults name out-of-control health care costs as one of their top fears in retirement, according to a recent survey by Nationwide Retirement Institute. At least the results suggest that most respondents understand that Medicare doesn’t cover everything, rather than assuming that the government insurance plan for those 65-plus is free and will foot all of their medical costs.

In fact, Medicare beneficiaries pay premiums for their Part B doctor coverage and any supplemental plans they buy, as well as co-payments and other out-of-pocket costs—not to mention expenses that Medicare doesn’t cover at all, such as routine dental care.

The bad news is that many people aren’t doing enough to prepare for retirement medical expenses: One in three older adults say that they would be unable to pay for an unplanned expense as low as $500 in today’s dollars, according to Nationwide. And half of adults age 50 and over have not discussed retirement health care costs with their spouse.

“Denial is powerful,” says Marcia Mantell, author of What’s the Deal With Retirement Planning for Women? and a contributor to the HealthView Services report.

Here’s a conversation starter: A healthy 55-year-old woman will incur health care costs of $522,827 in retirement, including insurance costs, assuming she retires at 65 and lives to the average female life expectancy of 89, according to HealthView Services. On average, she will receive $532,926 in lifetime Social Security benefits. In other words, health care costs will eat up 98% of her cumulative gross Social Security income. (HealthView Services' calculations assume that the woman is single; a married woman might have additional spousal or survivor benefits.) A healthy 55-year-old man’s health care costs from 65 to the average male life expectancy of 87 are $444,007, and his projected Social Security earnings over his shorter lifespan are $616,790.

These cost projections assume the retiree is on Original Medicare and has a Part D drug plan and a Plan F Medigap supplement policy. Calculations are in future dollars and don’t even include possible long-term-care costs. Medicare doesn’t cover long-term custodial care, including help with everyday tasks such as eating and bathing.

While these numbers may seem overwhelming, the costs are manageable if you start early, socking away more money in a 401(k) or IRA, Mastrogiovanni says. "It's not a lot of money when you break it down," he says.

To help with long-term care costs, in addition to traditional long-term care insurance, there are life insurance policies with a long-term care rider that pay proceeds to the policy holder’s heirs if no care is needed.

In addition to these moves, people should talk about their wishes for end-of-life care with their loved ones, Mantell says. For example, give your spouse permission to discontinue life support, if that’s your wish—it’ll save money and spare your spouse guilt.

Women need to actively plan for their own retirement health care needs, Mantell says: “We can care for our kids and our parents and our puppies, but we can’t leave ourselves out of the equation.”