In a 2022 survey, 35% of all workers reported they were either “not too” or “not at all” confident that they would have enough money to pay for their medical expenses in retirement. Regardless of your confidence, however, being aware of potential healthcare costs during retirement may allow you to understand what you can pay for and what you can’t.1
A retired household faces three types of healthcare expenses.
- The premiums for Medicare Part B (which covers physician and outpatient services) and Part D (which covers drug-related expenses). Typically, Part B and Part D are taken out of a person’s Social Security check before it is mailed, so the premium cost is often overlooked by retirement-minded individuals.
- Copayments related to Medicare-covered services that are not paid by Medicare Supplement Insurance plans (also known as “Medigap”) or other health insurance.
- Costs associated with dental care, eyeglasses, and hearing aids – which are typically not covered by Medicare or other insurance programs.
It All Adds Up
According to a HealthView Services study, a 65-year-old healthy couple can expect their lifetime healthcare expenses to add up to around $597,389 before accounting for inflation.2
Should you expect to pay this amount? Possibly. Seeing the results of one study may help you make some critical decisions when creating a strategy for retirement. Without a solid approach, healthcare expenses may add up quickly and alter your retirement spending.
Prepared for the Future?
Workers were asked how much they have saved and invested for retirement – excluding their residence and defined benefit plans.
Source: EBRI.org, 2022
- EBRI.org, 2022
2. HVSFinancial.com, 2022
Medicare At 65+
When you turn 65, you become eligible for Medicare if you:
- Either receive or qualify for Social Security retirement cash benefits
- Or, currently reside in the United States and are either:
a. A U.S. citizen
b. Or, a permanent U.S. resident who has lived in the U.S. continuously for five years prior to applying
How you enroll at age 65 depends on whether or not you are already receiving Social Security retirement benefits or Railroad Retirement benefits. Also, there are circumstances in which someone may become Medicare-eligible at age 65 but defers Medicare enrollment without future penalties—for instance, if an individual has qualifying insurance from an employer.
How much you have to pay for your Medicare coverage depends on your work history (i.e. if and how long you have paid Medicare taxes). Everyone owes a monthly premium for their medical insurance (Part B). Most people with Medicare get their hospital insurance (Part A) premium-free.
For questions regarding Medicare eligibility, call the Medicare Rights Center’s free national helpline at 800-333-4114.
Qualifying For Medicare Under Age 65
When you are under 65, you become eligible for Medicare if:
- You have received Social Security Disability Insurance (SSDI) checks for at least 24 months
- Or, you have been diagnosed with End-Stage Renal Disease (ESRD)
Eligibility for Medicare due to a disability
You may qualify for Medicare due to a disability if you have been receiving SSDI checks for more than 24 months, also known as the two-year waiting period. The two-year waiting period begins the first month you receive an SSDI check. You will be automatically enrolled in Medicare at the beginning of the 25th month that you receive an SSDI check.
If you receive SSDI because you have Amyotrophic Lateral Sclerosis, or ALS, Medicare automatically begins the first month that your SSDI benefits start. You do not have the two-year waiting period.
Social Security—not Medicare—makes the determination of whether you qualify for SSDI checks and administers the program that provides the checks. For more information on the Social Security Disability Insurance program, it is recommended that you contact your local Social Security Administration (SSA) office.
Note: Railroad workers should contact the Railroad Retirement Board for information about disability annuity and Medicare eligibility.
Eligibility for ESRD Medicare
You may qualify for ESRD Medicare if you have been diagnosed with kidney failure and you:
- Are getting dialysis treatments or have had a kidney transplant
- You are eligible to receive SSDI
- You are eligible to receive Railroad Retirement benefits
- Or, you, a spouse, or a parent have paid Medicare taxes for a sufficient amount of time as specified by the Social Security Administration
If you are under 65 and have ESRD, when your Medicare benefits begin depends on your specific circumstances, including when you apply for Medicare, whether you receive dialysis at home or at a facility, and whether you get a kidney transplant. If you are eligible for ESRD Medicare, you can enroll in Parts A and B together at any time. Part A will be retroactive up to 12 months, but it cannot start earlier than the first month you were eligible for ESRD Medicare.
Note: If you are a railroad worker with ESRD, you must contact Social Security—not the Railroad Retirement Board—to find out if you are eligible for Medicare.
Because Social Security and Medicare eligibility rules are complex, it is recommended that you call Social Security at 800-772-1213 to get the most accurate information regarding your particular situation.
© Medicare Rights Center. Used with permission.
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