September 26, 2023By Javier Simon; Fox Business News August 2nd, 2023 Estimated healthcare costs for retirees have nearly doubled since 2002. The average 65-year-old retiring today could expect to spend $157,500 on healthcare costs throughout their retirement, even with Medicare coverage, according to a study by Fidelity Investments. For married couples, that rate increases to $315,000. The 2023 estimate remains flat from the previous year as provisions in the Inflation Reduction Act are expected to limit out-of-pocket prescription drug costs for retirees beginning in 2025, Fidelity said. While this year’s estimate offers a welcome reprieve from a decade of increasing healthcare costs, retirees are still expected to cover significant costs above and beyond what Medicare covers,” Hope Manion, Fidelity Workplace Consulting senior vice president and chief actuary, said in a statement. “Understanding what your healthcare costs may be in the future is an essential part of the retirement planning process.” An average couple expects to spend just $41,000 on healthcare once they retire, according to Fidelity. Inflation Reduction Act provisions aim to lower healthcare costs for retirees Passed in 2023, the Inflation Reduction Act contains provisions designed to improve the Medicare program and expand benefits for retirees. Here’s a glance at how it aims to improve Medicare Part D. $35/month for covered insulin prescriptions Annual cap of $2,000 on out-of-pocket prescription drug costs in Medicare, beginning in 2025. Expansion of the low-income subsidy program or “Extra Help” under Medicare Part D to 150% of the federal poverty line, beginning in 2024. In addition, Medicare will be able to negotiate with drug manufacturers to lower the price of some brand-name Medicare Part B and Part D drugs. Moreover, drug companies that increase their drug prices faster than the rate of inflation would be required to pay Medicare a rebate. “Our analysis finds that limits on how much retirees can spend on prescriptions covered by Medicare Part D from the Inflation Reduction Act are likely to temporarily offset the overall inflationary trend of healthcare costs for retirees,” Manion said. “Even so, those planning for retirement need to build a plan that incorporates the still-high cost of healthcare and the medical and drug expenses not covered by Medicare.”