Costs Are Going Up; How to Get My Medical Expenses Spending Under Control

Medical Expenses for Retirees on the Rise

Isn’t healthcare for retirees covered under Medicare?

Healthcare costs surprise many retirees. For most Americans, health care will be one of the largest expenses in retirement, after housing and transportation. The average couple will need $285,000 in today's dollars for medical expenses in retirement, excluding long-term care. Retirees pay out-of-pocket medical expenses in the form of premiums, copays, deductibles, extra medication costs, and uncovered services such as dental, eye and hearing care. Additionally, Medicare does not cover long-term care which may be the biggest expense of all for some seniors.

Rising Medical Expenses

According to a Kaiser Family Foundation study (2018), the average out-of-pocket costs for a Medicare beneficiary amounts to 41% of the average per capita Social Security income. That’s expected to increase to 50 percent by 2030. The burden of healthcare spending is higher for older beneficiaries, women and those in poor health. For example, beneficiaries who were 85 or older spent an average of 74% of per-capita Social Security income on medical expenses.

Studies show that over a third of U.S. adults are more concerned about covering health costs in retirement than paying off debt and affording lifestyle expenses right now, but only about half have a financial plan in place for the future.

Medicare will increase Part B premiums for 2020. Other copayments will likely go up also. Additionally, in a move to reduce overuse, congress voted to eliminate Medicare supplemental plans that cover the Part B deductible. Fortunately, some consumers will save some medical expenses in 2020 as the prescription drug donut hole closes. For more information, read “What Will Medicare Cost Me? Medicare Plans in 2020”.

Tips for Getting Medical Expenses Under Control

1. Analyze your Medicare/healthcare plans and options.

Get an initial health coverage analysis when you plan to retire. Often, retirees overlook the importance of this in financial planning. However, as the stats show, medical expenses can make a big difference to your finances. Don’t just pick a plan based on a friend’s recommendation or a familiar company name. Take time to analyze the best option for you (or, better yet, get a professional to help).

And, review your coverage every year during open enrollment. Each year, plans change as do your needs. Open enrollment provides an opportunity to check if your plan is still the right one. Research indicates many seniors are paying too much by being in the wrong plan.

On top of that, special programs exist to assist with medical expenses. Here are four ways to get help with Medicare costs. You may also be eligible for VA benefits, Medicaid and other programs.

Our professional patient advocates can help with Medicare analysis and connecting you to various programs and resources

talk to a patient advocate for your doctor appointment

2. Advocacy can help you get better care, but also save on unnecessary medical expenses.

You should always ask questions and get information about your medical care. Work with your medical providers to understand the goals of tests and treatment. For elderly patients in particular, endless testing and treatment may not fit with their wishes at this point of life (and health). This is not to say that elders shouldn’t get necessary screenings, but providers and patients often neglect to discuss these issues.

Coordinated care also saves costs and improves outcomes. Poor care coordination leads to failures in transmitting critical patient information, adverse drug interactions, conflicting treatment plans, and lapses in necessary treatment. Failures in patient communication and education were among the root causes of almost 200 significant medical events in a Joint Commission study. All of this can lead to deadly consequences for you. And, even when it doesn’t, it leads to higher costs to remedy the mistakes.

Get a regular medication review also. You may be taking redundant or ineffective medications for your current needs. This can make a big difference in your health, and, of course, also your medical expenses.

3. Use preventative measures to avoid more costly medical care.

A healthy lifestyle equals lower medical expenses in most cases. For example:

  • Inactivity has been estimated to cost between $670 to $1,125 per person per year.
  • Retirees in poor health had medical expenses of about $1000 more/year than those with good health.

Along with taking steps to live healthier, be sure to get health checkups and screenings. Medicare covers a large range of preventive care at 100%. Additionally, make sure your home is aging-in-place friendly. One study found participants saved over 6x the amount spent on home modifications in medical expenses. Click Here to get our free aging-in-place home checklist.

4. Review bills and know your rights.

Start by organizing your records and bill paying system. When you’re disorganized or overwhelmed, it’s easy to miss something. Always review your bills and understand what you’re being charged. 

There are rules on everything from how companies can market Medicare plans to your appeal rights when denied care/coverage. The Medicare Rights Center offers a lot of quality information. We regularly share tips and resources on our blog too. Reach out to a patient advocate if you have questions about your Medicare rights or need help navigating insurance, providers or appeals.

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