Major Changes Could be On the Way for Medicare

Retirement Income

Major Changes Could be On the Way for Medicare

Posted by Asset Protection Group
10 months ago | December 9, 2019

As you plan for retirement, have you thought about your healthcare expenses? We often find that pre-retirees simply assume that Medicare will kick in at age 65, and cover all necessary medical care.

Unfortunately, that isn’t quite true. While we are all eligible for Medicare at 65, assuming we paid taxes into the system for at least ten years, the program is not designed to cover all medical expenses. In fact, according to estimates from Fidelity, the average couple retiring today can expect to spend $285,000 on healthcare over the course of their retirement years.

Why is that figure so high? Medicare is designed to cover some essential healthcare needs, but you will still pay a premium for Parts B, C, and/or D coverage, as well as deductibles, co-pays, and the full cost of uncovered services. Those uncovered services include dental, vision, and hearing care, along with out-of-pocket prescription drug costs. Some Advantage plans do cover these items, but of course the premiums usually reflect that fact.

If those projected expenses alarm you, you are not alone. In fact, Congress is currently considering a bill to expand Medicare so that dental, vision, and hearing services would be covered under the Original Medicare. The bill would also allow Medicare to negotiate prices with drug companies, and would cap out of pocket spending on drugs at $2,000 annually for beneficiaries.

The bill also seeks to expand the low-income subsidy program which helps to cover premiums for Part D (prescription) coverage and other out-of-pocket expenses.

While the bill has yet to pass, it has generated quite a bit of buzz in DC. We’ll keep you updated on changes to retiree benefits that might affect you in the future. In the meantime, continue planning for a retirement income that will cover your projected healthcare expenses and other aspects of your lifestyle. Give us a call, and we can help you estimate your savings needs.

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