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Retirement

How Much Will Health Care Cost?

Retirement health-care costs will vary depending on your health and longevity, but it may help to have a guideline.

These are the estimated savings required for an individual or couple who turned 65 in 2019 to have a 90% chance of meeting expenses for Medicare Part B health insurance, Part D prescription drug coverage, Medigap Plan F, and out-of-pocket drug costs, assuming median prescription drug expenses.


What Health Services Aren’t Covered by Medicare?

Original Medicare — Part A (Hospital Insurance) & Part B (Medical Insurance) — offers broad coverage, but many services are not covered.

Some may be fully or partially covered by a Part C (Medicare Advantage Plan), which replaces Original Medicare, or a Medigap policy, which supplements Original Medicare. Both are offered by Medicare-approved private insurers (You cannot have both a Medicare Advantage Plan and a Medigap policy).

Whether you are looking forward to Medicare in the future or are already enrolled, you should consider these potential expenses:

Deductibles, Copays, & Coinsurance.

Costs for covered services can add up, and — unlike most private insurance — there is no annual out-of-pocket maximum.

Medicare Advantage and Medigap plans may pay all or a percentage of these costs and may include an out-of-pocket maximum.

Prescription Drugs.

For coverage, you need to enroll in a Part D prescription drug plan or a Medicare Advantage plan that includes drug coverage.

Dental & Vision Care.

Original Medicare does not cover routine dental or vision care. Some Medicare Advantage and Medigap plans may offer coverage for either or both of these needs.

You might also consider private dental and/or vision insurance.

Hearing Care & Hearing Aids.

Some Medicare Advantage plans may cover hearing aids and exams.

Medical Care Outside the United States.

Original Medicare does not offer coverage outside the United States. Some Medicare Advantage and Medigap plans offer coverage for emergency care abroad.

You can also purchase a private travel insurance policy.

Long-Term Care.

Medicare does not cover “custodial care” in a nursing home or home health care.

You may be able to purchase long-term care (LTC) insurance from private insurers.


Source: Employee Benefit Research Institute, 2019

*Medigap Plan F is used for these estimates because it is the most comprehensive coverage available and simplifies the calculation. However, this plan may not be available for new beneficiaries after January 1, 2020. Current enrollees may keep Plan F, and most other plans will remain available for new enrollees.

A complete statement of coverage, including exclusions, exceptions, and limitations, is found only in the LTC insurance policy. It should be noted that LTC insurance carriers have the discretion to raise their rates and remove their products from the marketplace.

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