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The law's focus is expanding access to people under age 65. But it also would benefit many retirees by gradually closing what's known as the "doughnut hole" coverage gap in the Medicare drug benefit. Seniors fall into that hole once they spend $2,830 per year. The legislation would begin narrowing the gap by providing a $250 rebate this year. The gap would be fully closed by 2020, when seniors would still be responsible for 25 percent of the cost of their medications until Medicare's catastrophic coverage kicks in.
Patel said the gap's closure is likely to yield only a "very modest" reduction to Fidelity's $250,000 overall cost estimate.
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 Employee Benefit Research Institute, an independent nonprofit, conducts similar research but, unlike Fidelity, doesn't focus on an average. That's because there are so many variables that many retirees' costs will end up far lower or higher than any average, said Paul Fronstin, EBRI's director of health research and education.
For example, EBRI estimated last year that a retired couple would need $416,000 for health care costs if their drug costs were far higher than average, in the 90th percentile. If that same couple lives longer than three-quarters of retirees, the estimate rises to $614,000.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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