Health care – a global concern: Part 1 – Sun Life Financial

Around the globe, there is widespread concern in both developed and developing nations around health and the affordability of health care, especially in retirement.

May 21, 2009 – The population is aging. Rapidly. Global numbers for life expectancy rose from 47 years in 1950-1955 to 65 years in 2000-2005. And the numbers are expected to rise to 75 years in 2045-2050. This bulge in the demographics, especially in developed nations, will test and impact government social policies and health-care systems around the world. The population seems to be taking note.

Asia and health care

A Sun Life survey conducted in Asia found that people are thinking about health more than ever before. This is especially true in Hong Kong and China where both personal and parental health are serious concerns. In Hong Kong, 77% of those surveyed indicated they think more about health than 5 years ago.

What are we thinking about? For many of us, we’re thinking about the cost of health care. In the Philippines and Indonesia, 54% of respondents first associate health care with expense.2 And a November 2008 Gallup poll revealed the Chinese population worries more about having enough money to pay medical costs than they do about having enough for retirement, their children’s education or to maintain their standard of living.

Across the globe, faith in government health-care systems is low.3 In Asia, personal savings are considered the most important source of financing for health-care treatment. Confidence in ability to pay for health care in Indonesia, India and Philippines is 24%, 19% and 19% respectively. China and Hong Kong are less confident in being able to pay for health care – only 5% and 6% say they are “very confident”.

North Americans and health care

North Americans aren’t immune to health-care concerns. Almost half of U.S. adults are “very” to “extremely” worried about having to pay more for health care or health insurance. Only 8% are not worried at all. Those ages 45 to 64 years old are most worried (56%), but 37% of those ages 18 to 34 have concerns as well.

Their concerns appear valid. According to the Centre for Retirement Research’s March 2009 National Retirement Risk Index, when health-care costs are included in the calculations, the percentage of households in America considered “at risk” increases from 44% to 61%. “At risk” is defined as unable to maintain their standard of living in retirement. Previous analysis of health-care costs did not consider potential expenses for long-term care towards the end of life.

Unfortunately, long-term health-care costs may be the reality for many. According to our U.S. Unretirement Index3, 77% of Americans aged 40-49 who plan to work past traditional retirement age are doing so to receive health-care benefits. Yet half of the boomers in the U.S. who have retired early have done so for health reasons. The majority live in lower-income, less-prepared households – the people who most need the income and benefits that come with prolonged employment.

Canadians, too, have very real concerns about health-care costs. According to Statistics Canada, by 2012, half of the workforce will be 55 or older and almost a quarter of them will be more than 60 years old. For Canadians, as for the rest of the world, increased longevity means their parents are living longer, too. Many baby boomers expect to pay long-term health-care bills for both their parents and for themselves. Few retirees and entrepreneurs have a benefits package or sufficient savings that allow them to do this.

A global challenge

Older populations around the world face different standards of living. According to the World Health Organization’s 2008 World Health Report, annual government spending on health worldwide varies from just $20 US to more than $6,000 US per person. More than 100 million people a year fall below the poverty line because of personal health expenditures, and as many as 5.6 billion people have to pay for more than half of their health expenditures themselves.

Covering long-term health-care expenses in retirement introduces potential challenge for individuals and governments around the world. Longevity is sure to challenge health-care systems to find better and cost-effective treatments for chronic health problems, and to build health-care systems capable of handling the load.

About Sun Life Financial

Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of September 30, 2008, the Sun Life Financial group of companies had total assets under management of CDN$389 billion. Visit