It can be a rude awakening for retirees to go from being covered by a big-name insurance like Regence, Blue Cross, or Aetna to being covered by Medicare.
Los Angeles, CA (PRWEB) June 18, 2013
GreyWingFinancial.com personal finance and economic magazine for seniors today released its tips to seniors about healthcare planning and saving, especially when it comes to Medicare. GreyWingFinancial.com encouraged its readers to explore the big differences between Medicare and the private insurances they’ve likely been using, and to financially plan accordingly.
A U.S. News Money article by Emily Brandon, published June 17th 2013, reports that according to Fidelity, a 65-year-old couple retiring this year should have about $220,000 set aside in savings specifically for healthcare costs, and the Employee Benefit Research Institute estimated this number to be between $227,000 and $283,000. Brandon reports that these numbers are on top of a couple having and actively using Medicare for their health insurance, accounting for the out-of-pocket costs associated with Medicare Parts A, B and D. Brandon stated that though most people prefer to save for the fun parts of retirement, such as travel and leisure activities, healthcare services typically come up towards the later years of retirement and can require a lot of saving and planning to cover their expense.
GreyWingFinancial.com is quoted as saying, “It can be a rude awakening for retirees to go from being covered by a big-name insurance like Regence, Blue Cross, or Aetna to being covered by Medicare. It can be even more challenging when one’s employers were the ones covering the monthly premiums on these plans, and especially if the plans came with a low or no deductible. Medicare tends to have more out-of-pocket costs than these other insurances, and I would strongly urge our readers to consider the differences and plan far, far ahead about how they are going to pay for the costs.”
According to Brandon’s article in U.S. News Money, retirees should expect to pay a premium for Part B medical insurance but not for Part A, and that many people choose to have the premium deducted from their Social Security check. Brandon warns that couples who earn greater than $170,000 and individuals that make more than $85,000 will pay more in premiums for Part B. Brandon advises also considering the copays for prescriptions, which vary based on plan, and deductibles after which retirees must pay 20% of the Medicare-approved amount for the medical service received. Unlike other health insurances, there is no annual limit for how much one can pay out of pocket. Brandon added that among the services not covered by Medicare are hearing aids, dentures, eyeglasses, and long-term assisted living facility or nursing home care.
GreyWingFinancial.com advised its readers to start budgeting now for what is not covered, and to speculate into how much will be taken out of their Social Security checks for Medicare premiums. GreyWingFinancial.com is quoted as saying, “If you start saving and planning early enough, it is possible to plan around the challenges that Medicare might pose and be financially prepared when the time comes. Some retirees might opt to purchase Medicare supplement insurance policies, which cover things like nursing homes, deductibles and copays. If retirees do choose to go this route, they definitely need to work it into the budget as well. When purchasing any type of insurance, be it liability car insurance, no exam insurance, or homeowner’s insurance, it’s important to review your finances and determine how much you can afford to spend. With a Medicare supplement insurance, you would simply be adding one cost to do away with another. I highly recommend you do your homework and try to figure out how much it might save you in out-of-pocket expenses down the road.”
GreyWingFinancial.com is an online finance advice column for seniors and retirees, aimed at assisting them with the lifestyle and financial queries that may come up during retirement or while planning and saving for retirement. GreyWingFinancial.com’s articles include topics about travel, saving, investing, healthcare, and hobbies to enjoy during retirement.