document: Retiree health cost estimate falls , for a change BOSTON - Rising health care costs are a given . But for the first time in 10 years , the outlook is improving for new retirees wondering whether they 'll be able to pay their medical bills throughout their retirements . A 65-year-old couple retiring this year will need $ 230,000 , on average , to cover medical expenses in retirement , according to a study to be released Thursday by Fidelity Investments . That 's down 8 percent from the $ 250,000 projection the Boston-based financial services company made a year ago . That 's notable because the total had risen each year since Fidelity made its initial calculation of $ 160,000 in 2002 . Annual increases have averaged 6 percent . Fidelity attributes its optimism to President Obama 's year-old health care overhaul , which will reduce many seniors ' out-of-pocket expenses for prescription drugs . The projections are part of Fidelity 's business helping employers design workplace benefits programs . The study is based on projections for a couple of 65-year-olds retiring this year with Medicare coverage . The estimate factors in the federal program 's premiums , co-payments and deductibles , as well as out-of-pocket prescription costs . The study assumes no employer provided insurance in retirement , and a life expectancy of 85 for women and 82 for men . The calculation was complicated this year by the health care bill that Obama signed into law in March 2010 . Although its focus is expanding health care access to people under age 65 , the law also will benefit many retirees by gradually closing what 's known as the '' `` doughnut hole '' '' coverage gap in the Medicare drug benefit . Fidelity says that 's the key reason why its projection is down this year . But that effect will run its course . Longer-term , retirees ' cost savings are n't expected to offset other factors driving expenses up , such as new medical technologies , greater use of health care services , and more diagnostic tests . That 's why Fidelity expects its calculation will eventually resume its historic pattern of annual increases . '' `` We expect that trend to continue when we look to 2012 and beyond , '' '' said Sunit Patel , a senior vice president for benefits consulting at Fidelity . Fidelity 's estimate is a projection of what an average couple would need . Actual costs will vary widely , depending on a couple 's medical needs and how long they live . The projection also does n't factor in most dental services , or long-term care , such as costs from living in a nursing home . In any given year , about one in four Medicare beneficiaries have drug expenses high enough to hit the doughnut hole , in which they 're responsible for the full cost of their medications . The older one gets , the greater the chances of landing in that hole at some point because of an illness requiring costly prescription drugs . For 2011 , the coverage gap starts after Medicare beneficiaries and their insurance plan have spent $ 2,840 on medications . After that , seniors are responsible for roughly the next $ 3,600 . Once total spending reaches about $ 6,440 , Medicare 's catastrophic coverage kicks in and beneficiaries pay only a small amount . Under the new law , the gap will be gradually eliminated by 2020 . When the changes are complete , seniors will just pay the regular 25 percent cost sharing for all their medications . The Employee Benefit Research Institute , an independent nonprofit , conducts similar research but , unlike Fidelity , does n't focus on an average . That 's because there are so many variables that impact a retiree 's circumstances , says Paul Fronstin , EBRI 's director of health research and education . In its latest annual estimate released in November , EBRI projected that a couple with median drug expenses - meaning half of the population would have higher , and half lower - would need $ 158,000 for a 50 percent chance of having saved enough to cover health care expenses in retirement . They 'd need $ 271,000 for a 90 percent chance . EBRI 's study did n't closely examine the savings impact from the health care law because of differences in how it makes its projections compared with Fidelity . Advertisement
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extractive_keyphrases: bostonbased financial services 65yearolds 2840 medicare coverage doughnut hole sunit patel 160000 new retirees 8 percent 3600 boston 271000 rising health care fidelity attributes fidelity investments 158000 65yearold retiree health cost 250000 6440 230000
abstractive_keyphrases: president obama's yearold health care fidelity's longerterm retirees' ebri's