By Jordan Dechtman, Wealth Management
09/14/2010 Premiums for Medicare prescription drug coverage, known as “Part D,” will increase only about $1 to an average of about $30 a month in 2011, according to the U.S. Centers for Medicare and Medicaid Services. By contrast, AARP reported last week that retail prices for brand-name prescriptions widely used by Medicare recipients rose 8.3 percent in 2009, far beyond the rate of general inflation.
With more than 1,600 Medicare Part D plans offered by insurers in 2010, evaluating benefits and premiums can be overwhelming for recipients. According to the Associated Press, Medicare has taken steps to make the selection process easier by notifying insurers they will no longer be able to offer more than one “basic” drug plan in a location. The new healthcare law also attempts to shrink the doughnut hole – a gap in coverage between limits during which patients must pay all of their prescription drug expenses out of pocket – by giving $250 rebates to Part D recipients who hit the gap.
Part D premiums and prescription expenses are just part of the retirement healthcare picture. The Center for Retirement Research at Boston College found that a typical married couple at age 65 faces health care expenses of $197,000 through the rest of their lives – an amount that rises to $260,000 when including nursing home costs. A 2008 study by the Employee Benefit Research Institute estimated that a couple who retired that year at age 65 would need $635,000 in savings to cover Medigap supplemental coverage premiums, Medicare Part B and Part D premiums and out of pocket expenses. For those retiring in 2018, that amount increased to more than $1 million.
Planning for health care costs – including understanding the intricacies of government-funded programs like Medicare – is an important part of estimating your financial needs during retirement. If you or a loved one has had a change in your health condition that may affect your financial needs, please call your personal financial advisor, Jordan at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website at www.JordanDechtman.com so we can talk.
Jordan Dechtman, Wealth Management
A strong relationship with a competent, caring and thorough independent investment advisor is the best way for you achieve your most important financial goals. At the same time, you want the convenience and comfort of world-class client service. Jordan Dechtman Wealth Management structures its busin…
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