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American workers are living increasingly longer and that has them increasingly concerned that the money they saved over their lifetime won't be enough to cover costs associated with healthcare during retirement.

According to a survey conducted by the Employee Benefits Research Institute, less than 1 in 5 American workers are highly confident that their nest egg will be big enough to pay for the healthcare expenses they're likely to face in their golden years.

Survey says
EBRI's 25th annual retirement confidence survey found that only 18% of American workers are highly confident that they'll be able to cover their medical expenses in retirement.

That means that just 14.7 million of the 81.5 million Americans age 45 to 64 years have sleep-at-night confidence about their pending retirement.

Additionally worrisome is that the EBRI study found that American workers are even less confident that they'll be able to afford long-term care. Only 14% of respondents believe they'll have socked away enough money during their working years to cover those costs.

Why retirees are nervous
Data collected by the U.S. Centers for Disease Control and Prevention show that 19% of Americans age 75 and older report having been hospitalized for illness or injury at least once in the previous year.

The CDC data also shows that less than 5% of Americans older than 75 were able to avoid a visit to a doctor, an emergency room, or home healthcare in a given year and that 36.3% of them suffer from heart disease and 21.4% of them have been diagnosed with cancer. Separately, estimates suggest that roughly a third of all Americans over 85 will be diagnosed with Alzheimer's disease.

Those staggering statistics are a sobering revelation, especially when we consider that the cost of caring for those conditions is big and growing.

According to the Kaiser Family Foundation, the average cost of an inpatient stay at a hospital totaled $1,878 at state and local hospitals per day in 2013, up from $1,227 in 2003.

Costs are also surging for specific disease treatment due in part to costly next-generation medical devices and medication that work better and are safer to use. For example, innovation in treating heart disease has led to annual treatment costs for heart disease and stroke historically being twice as high as the costs for all other conditions and, as a result, up to 75% of $3 trillion America spent on healthcare last year went to treating patients with heart disease.

Spending on cancer therapy is similarly daunting. The CDC reports that the average annual medical spending by a male cancer survivor totaled $8,091 between 2008 and 2011. That's significantly higher than the $3,904 in annual medical spending by males without a cancer history. Annual costs for female cancer survivors in that period totaled $8,412 versus $5,119 for females without a cancer history.

Expenses tied to Alzheimer's disease, however, could really break the bank. Since there's no cure for Alzheimer's disease, most patients end up requiring significant care by others and that care is expensive. Genworth Financial estimates that a semi-private room in a nursing home costs $77,380 per year and that a year of basic services in an assisted living facility will run $3,500 per month.

Things to consider
Some American workers may be underestimating their ability to pay for medical costs because roughly 39% of retirees are highly confident they can afford their medical expenses. However, worker pessimism shouldn't be discounted because 21% of retirees are either not at all confident or not too confident in their ability to afford healthcare.

If worker worry translates into decisions made today that can solidify financial security down the road, then pessimism may ultimately be a good thing, not a bad thing. That's because small changes made today can have a big impact down the road. For example, boosting your retirement contribution by the same amount as your annual pay raise can mean more money in retirement due to the compounding of interest and healthier lifestyle choices could reduce the likelihood of developing costly diseases, such as diabetes, later in life.

Regardless, if you're among one of the working Americans worrying about your future healthcare costs, educating yourself about money matters and planning ahead could help you become one of those few Americans who are highly confident about their financial future. 

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