A recent study by the AARP reveals sobering statistics about the cost of prescription drugs. It shows a trend that we think every senior needs to take into account as they plan for retirement.
The news: between 2006 and 2013, the average retail price for prescription drugs most commonly used by seniors – including brand name, generic and specialty drugs – more than doubled. Costs soared from an average of $5,571 in 2006 to $11,341 in 2013. What’s more worrisome is that this price spike seems to be increasing, with 2013 showing markedly higher increases than previous years.
“If these trends continue, more and more Americans will simply be unable to afford the medications that they need to get and stay healthy,” said Debra Whitman, AARP’s chief public policy officer, quoted in the article.
Click here to read the AARP piece which also contains a link to the full report.
The average cost of a prescription drug, now more than $11,000, can represent an impossible financial hurdle for many seniors. That dollar amount equals about three-fourths of the average Social Security benefit, says AARP. In 2013 alone the price hikes soared at six times the rate of inflation, and the trend does not appear to be slowing.
It’s true that most of that sky-high cost is for specialty drugs to treat conditions including cancer and other diseases. But the cost of brand-name drugs actually increased at a faster rate in 2013, rising almost 13 percent. And the skyrocketing cost increases affect everyone. Those on some Medicare plans may find their share of the drug costs rising beyond their reach. Meanwhile employers will have to deal with rising drug costs as they negotiate new insurance plans each year. When that happens, shared out-of-pocket costs for employees generally tend to rise while benefits are often reduced.
How does this affect you? We have a few recommendations. First, you should do all you can today to stay as healthy as possible. Starting an exercise regimen, stopping unhealthy habits like smoking, and making changes to your diet are all excellent places to begin. You may wish to follow our advice and consult a geriatrician – a physician who specializes in aging. Contact us and we’ll provide some suggested names.
Second, if you’re on a prescription drug and feeling the pinch, make certain you find out about generic substitutes. Generic drug prices are also on the rise, says AARP, but their cost remains far less on average than name brands. Your physician or pharmacist should be able to suggest some lower-cost alternatives in many cases.
Finally, as we always remind our clients and radio listeners, you need a plan – a blueprint for your retirement that will help you protect your assets and avoid becoming a burden to your loved ones. We call it a LifePlan. It will help you plan for your medical needs so that you won’t have to be so worried about rising costs. A LifePlan also takes into account all the other aspects of your retirement: putting your legal affairs in order, putting a financial plan in place, making sure your family knows your wishes, and exploring the best housing options for your retirement years.
You can take the first step toward establishing your own LifePlan by attending one of our free LifePlanning Seminars. To find out the dates, times and locations, and to register, click on the Upcoming Events tab on this website. We will look forward to meeting and talking with you at one of these popular events. Then if you wish to meet with us for a personal consultation, we’ll be happy to arrange a time. Our desire is for you to be able to experience a joyful, independent retirement, free from the worries that plague so many seniors. It can be done! Let us show you how.
(Originally reported at http://blog.aarp.org)