Tuesday, May 21, 2013

Retiree Health Insurance costs mount on top of Medicare (Fidelity study)

Health care costs in retirement are likely to large for most seniors, even with Medicare, according to a Fidelity Investments study discussed Sunday by Michelle Singletary in the Washington Post in her “Color of Money” column, link here

The estimate (of $220000 per couple living into the 80s) does not include dental (including restoration), and over-the-counter, and particularly does not cover nursing home care (which Medicare normally does not cover).  It does not appear to take account the possibility of purchasing Part B supplemental. I purchased it from AARP at 65, and it costs about $110 a month now. 
I could not find the study on the Fidelity site today (which seems underwhelming). 
One of the biggest drivers of “costs” for retirees is falling into “traps” where physicians feel obliged to order many disruptive tests and procedures. 
Another related issue is retiree health insurance from employers for retirees not yet 65.  I paid about $165 a month for ING’s policy, which covered only 70% of hospitalization.  Fortunately, I never needed it.
I did use the Part B Supplemental in 2010 for an outpatient hernia repair.  The coverage brought the list price of the surgery fro $14000 down to $3500, and United Health Care picked up the 20% ($650) copay without any questions. 
Also, when I switched to Medicare at 65, ING’s Part D was very expensive, but the AARP one was inexpensive.  I don’t know why.    

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