The likelier an event, the less profitable it is to insure. So when MetLife backed out of selling long term care insurance, it sent a signal that the risk of needing expensive medical care in old age has increased. Nursing home care or other long term care services would come on top of costs for Medicare Part B premium, Medigap coverage, and prescription drug coverage.

According to government figures, at least 70 percent of people over age 65 will eventually require some form of help with personal care such as dressing or using the bathroom and 40% will need a nursing home. Nursing homes now cost $80,000 a year on average.

More than half or workers say they’re not confident about having enough to cover medical expenses in retirement, data from the Employee Benefit Research Institute show.

However, many clients aren’t candid with their financial planners about their current health problems.

How much to save depends in part on inflation, how certain you want to be of covering your costs and your personal and family health history.  
Average figures for future costs vary widely, but cluster around $250,000 for a 65-year old couple retiring today.
Charles Farrell, an investment advisor with Northstar Investment Advisors in Denver, Colorado, calculates that nursing home and insurance costs all might double in the next ten years.  With that assumption, he figures that a 55-year old couple should plan on a million for insurance costs and two years in a nursing home for two.

Prudential Financial and the Center for Retirement Research at Boston College offer an estimate using expected present values for a couple age 65 in 2009. A study by Anthony Webb, the associate director for research at the Center, and Natalia Zhivan, a consultant, reported an average price tag of $197,000 for future insurance premiums, out-of-pocket costs, and home health costs—but not nursing home care.

With nursing home care, the average jumps to $260,000, with a 5-percent risk of exceeding $570,000. 

Last year, the Employee Benefit Research Institute estimated that men retiring at age 65 in 2009 will need anywhere from $68,000–$173,000 in savings to cover health insurance premiums and out-of-pocket expenses. That kitty provides a  50–50 chance of not running out of funds. For 90% certainty, they need $134,000–$378,000. Because women live longer, the number increases to $98,000–$242,000 for a 50–50 comfort zone and $164,000–$450,000 for a 90 percent chance. The 50-50 sum had gone up 9 percent since 2008 for men and married couples, and 16 percent for single women.  Those figures  don’t include possible long term or nursing home costs.

Again not including nursing home care, Fidelity Investments estimates that a 65-year-old couple retiring today will need $250,000 to pay for medical expenses in retirement.

In a survey, Fidelity found that  current retired couples spend $535 a month, or about one-fifth of their average total monthly expenses of $2,842. Eleven percent said their health care costs are $1,000 a month or higher.