During the retirement planning process, many clients are surprised to learn that Medicare won’t cover all of their medical costs. Yes, we all pay for the program and expect to enroll at age 65, but it’s not really that different from the health insurance plans you’ve utilized throughout the years. You will still be subject to monthly premiums, annual deductibles, and copayments for services and medications.
In fact, some services aren’t actually covered by Medicare at all! Or, the coverage might be limited or dependent upon your particular Medicare plan. Those services include:
- Dental checkups and procedures
- Dentures
- Vision screenings and corrective lenses
- Hearing aids
- Some podiatry services
- Cosmetic surgery (except reconstructive surgery after certain illnesses or accidents)
- The cost of a long-term nursing care facility
- Medical care received outside of the country
In addition, the cost of some chronic illnesses (like diabetes) can be excessive. You might regularly need products like insulin, which are notoriously high in cost.
So what can you do about out-of-pocket medical spending? First, investigate all of your Medicare options. While the coverage through Original Medicare can be limited, some Medicare Advantage plans have begun to roll dental and vision care into their packages.
If you do stick with Original Medicare, explore options like a Part D plan (for prescriptions) and/or Medigap (supplemental insurance). Medigap is designed to protect you from excessive out-of-pocket spending, and even covers the cost of medicare care received when traveling abroad.
Long-term care insurance is designed to help with the cost of a nursing home, but premiums will vary depending upon when you enroll. Choosing a plan in your late fifties can help to keep premiums lower.
And of course, you should expect to pay out-of-pocket to some degree, so we should work that expectation into your plan. Let’s discuss a realistic retirement budget at our next appointment.
