Fidelity recently released an estimate that might shock many retirees. According to researchers, the average 65-year-old couple will spend $260,000 in retirement on health care costs.1 That figure represents out-of-pocket spending above and beyond Medicare coverage. It includes things like copays, deductibles, premiums, and more.
Many workers assume that Medicare covers all health care costs in retirement, but that assumption is often incorrect. Medicare is a valuable resource for many retirees. It covers hospitalizations, doctor’s office visits, and possibly even prescriptions, depending on your plan selections.
It doesn’t cover everything, though. Depending on your specific needs, you may face substantial out-of-pocket expenses for health care. Below are three common health care costs that are often not covered by Medicare. If you don’t have a plan to pay for these costs, now may be the time to develop one.
Dental, Vision, and Hearing
These three types of care are usually covered by employer plans, so it may be surprising that they’re not covered by Medicare. They aren’t, though. The only time they are covered is if the treatment is related to some other condition that is covered by Medicare. However, don’t expect Medicare to cover your regular dental or vision checkups.
One alternative is to look at a Medicare Advantage plan. These are plans offered by private insurers. They typically include all traditional Medicare coverage, but are bundled with supplemental coverage for things like dental, vision, and hearing.
Do you plan to travel overseas or even live abroad in retirement? If so, you should spend some time developing a health care strategy. Medicare doesn’t usually cover treatment that is provided outside the United States.
If you’re travelling abroad, you can usually purchase private supplemental policies for coverage while you’re away. If you are moving to a new country, explore that nation’s health care options. It may offer government-backed health care to those who meet residency requirements, or you may need to purchase a private supplemental policy.
The U.S. Department of Health and Human Services estimates that 70 percent of 65-year-olds will need long-term care at some point. That care may be needed for years and it could cost thousands of dollars per month. It is also not covered by Medicare. Medicaid does cover long-term care, but only if you have few assets and little income.
Long-term care insurance may be a good alternative. You pay premiums to an insurer today, and then the insurer pays for some or all of your care in the future, depending on the terms of your policy. Many policies also cover in-home care, so you don’t need to move to a facility to take advantage of the protection.
Do you have a plan for these and other out-of-pocket health care costs? If not, let’s talk about it. Contact us today. We welcome the opportunity to help you analyze your needs and develop a strategy. Let’s connect today.
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