Drug Costs Threaten to Crack American Nest Eggs: New National Survey Reveals Lack of Awareness, Planning for Drug Costs Put Retirees' Savings at Risk
One in three retirees claim that they are spending far more on theirhealth care and prescription drugs than they expected, and 55 percent ofretirees admit completely overlooking their health care and prescription drugneeds when they were planning for retirement expenses, according to newresearch released today by Medco Health Solutions, Inc. (NYSE: MHS).
Not only did a sizeable proportion of retirees fail to properly plan forhealth care and prescription drug costs, but nearly half of all retirees (49percent) indicate they never assess the impact health care costs are having ontheir retirement savings or lifestyle.
The research was culled from "America's Unhealthy Nest Egg," a nationalsurvey of 1,000 Americans over age 65 conducted for Medco by DirectiveAnalytics.
"Retirees have planned for food, shelter, taxes and entertainment, but toomany neglect drug and medical costs - which are rising far faster than theinflation rate -are jeopardizing the quality of life they expect to enjoyduring retirement," said Sally Greenberg, Executive Director, NationalConsumers League. "The fact that many seniors have not planned for increasedhealth expenses, and the fact that many aren't aware of ways they may be ableto save on their medications, shows a real need for education about how tobuild a healthy nest egg."
The Medco research revealed that for one in four middle-income retirees,$1 out of every $10 of their monthly retirement income goes to pay formedications alone. Furthermore, fewer than half of retirees (48 percent)indicate that they use all of the tools at their disposal to save money ontheir medications; and approximately one in four (24 percent) claim to usevery few to no cost savings tools available to cut their medication expenses.
"It's a notable contradiction that retirees are facing high drug costs,yet either are not aware of, or choose not to use, the tools they haveavailable to save," said Donna Denardo, senior vice president, RetireeSolutions, Medco. "Now, more than ever, retirees are nervous about outlivingtheir ability to afford the escalating costs of living well."
In addition to the impact of monthly drug expenses, the survey alsorevealed a surprising lack of awareness among retirees of specific cost-savings tools:
Medco Launches National Push to Educate Retirees on Hidden Drug Savings
Medco unveiled today a multi-level initiative aimed at educating retireesabout tools to unlock hidden savings that they can use to reduce theirprescription drug expenditures. The program, "Prescription for a Healthy NestEgg" will provide retirees with information about the savings opportunities,where to look for hidden savings, and how much these tools could eliminatefrom their drug bill.
"The symptoms have been diagnosed; the prescription to cure this problemis information and education," said Denardo. "We have to reach out to retireesto encourage them to use all the tools they have to save, and to educate themabout savings tools they may not even know exist, so that they can protectthat nest egg they've spent years building."
As part of the initiative, Medco has developed a free consumer's guidecalled "Prescription for a Healthy Nest Egg: Half a Dozen Ways to Lower YourDrug Costs and Stretch Your Retirement Dollar." The free guide presents easy-to-understand information on savings tools that are largely unknown orunderutilized by retirees including generic alternatives; optimizing dosages;and eliminating overlapping medications from
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