BOSTON (TheStreet) - A new Fidelity Investments study says a 65-year-old couple retiring this year may need more than $250,000 to pay for medical expenses, not including nursing-home care.

That total is up 4.2% from last year and 56% from 2002, when Fidelity issued its first annual Retiree Health Care Costs Estimate. Inflation, increased doctor and hospital fees and the use of more expensive technology are among the factors contributing to the increase.

This week, the U.S. government passed a bill that aims to overhaul health care and expand coverage to more uninsured Americans. The yearlong debate brought renewed attention to the rising cost of medical care.

The Fidelity study found that health care costs average $535 a month, or one-fifth of an average retired couple's total monthly expenses of $2,842. The estimates apply to people who lack employer-provided coverage, but qualify for Medicare.

More than half (51%) of the respondents said they're paying out-of-pocket for health care costs not covered by Medicare and 45% have bought supplemental insurance to cover that gap.

As with any assessment of post-employment expenses, individual factors need to be considered. These variables can make setting a target goal a frustrating and emotional exercise. Some financial advisers recommend saving more than 1 million for medical costs.

Research released earlier this month by the Center for Retirement Research at Boston College offers better news. At age 65, a typical married couple, free of chronic disease, can expect to spend $197,000 on health care for the rest of their lives, with a 5% probability of costs exceeding $311,000, researchers say. Including nursing home care, the mean cost is $260,000, with a 5% probability of costs exceeding $570,000.

"Less than 15% of households approaching retirement have accumulated that much in total financial assets," the Boston College report says.

"Most individuals aren't really aware of the magnitude of the cost," says Sunit Patel, a senior vice president at Fidelity. "Our survey this year showed that about 50% of the participants were surprised or hadn't expected costs to be as high as they are actually experiencing in retirement. Given the essential nature of health care, I think those expenses deserve special treatment in retirement planning."

Patel says that even though much of the recent health care reform package is focused on those under 65, retirees may benefit from the closing of the so-called "doughnut hole" gap in Medicare Part D coverage. Seniors caught between the limit of their current drug coverage and the government's "catastrophic coverage threshold" can be stuck paying thousands of dollars out of pocket. The gap, under the reform package, would be eliminated by 2020, when seniors would be responsible for 25% of the cost of their medications until catastrophic coverage kicks in.

"If that piece of the bill makes it through, the amount that an individual over, or a couple in this case, would need to save would actually go down by a modest amount," Patel says.

-- Reported by Joe Mont in Boston.

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