Medicare can be helpful, but it will not cover everything.
It is an unpleasant truth.
Medicare will not cover all of your healthcare costs in retirement.
Yikes!
According to a recent The Motley Fool article titled “3 Reasons Seniors Can't Count on Medicare to Cover Health Costs,” couples may spend up to $350,000 in retirement—even if they have a purchased an optional supplementary Medicare plan.
Why will Medicare not be enough for you in retirement?
Medicare has limited long-term care coverage.
With 70 percent of those reaching age 65 eventually needing long-term care, odds are you will also require this service.
Often such care is needed for at least three years.
The issue?
Medicare does not cover all of these costs.
What will it cover?
Medicare will provide financial assistant for qualified hospital stays or skilled nursing care.
What is excluded?
Medicare, Medigap, and Medicare Advantage plans do not cover routine assistance with daily activities or with custodial care.
Time in a nursing home could be covered by Medicaid if your assets are limited enough to qualify.
Medicare can have high coinsurance costs.
Medicare can help pay for your care, but you cannot expect it to cover everything.
For example, inpatient care covered by Medicare Part A will still require a $1,316 deductible to be paid by you.
What if you stay for more than 60 days?
You will have a copay for $329 or more depending on how long you stay.
What about Medicare Part B or Medicare Part D?
Routine visits to the doctor and durable medical equipment are covered by Medicare Part B.
It does charge a co-pay of 20 percent for services.
Medicare Part D will often have high premiums and deductibles up to $400 for prescription coverage.
Medicare Part D may also include a copay.
Medicare has an uncertain future.
Financially, Medicare is in a bit of trouble.
In fact, a recent report projected the funds for covering Medicare Part A may be depleted by 2029.
As you can see, you cannot put all of your eggs in the Medicare basket.
Begin planning now on how you will cover medical and care costs in retirement.
Working with an experienced elder law attorney or financial planner can help you determine what you need to do now to set yourself up for success later.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
Reference: Motley Fool (November 12, 2017) “3 Reasons Seniors Can't Count on Medicare to Cover Health Costs”
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