By Kathy Cooper
Kaiser Family Foundation recently reported that increase in seniors' share of the cost burden for Medicare under Obamacare will negatively affect most seniors. The purpose of the Kaiser study was to determine how well seniors would be able to absorb rising Medicare premiums, co-pays, deductibles and related costs. The study concluded that most seniors are of modest means – low income, low savings and low home equity.
Baby boomers are just finding out how Medicare works and how much they will end up paying for normal healthcare expenses as they enter retirement. Medicare premiums, co-payments for doctor visits and some other services such as tests are deducted from their monthly Social Security checks and typically account for over 15% of those checks. Medigap insurance policies can help but often do not cover all of these out-of-pocket expenses. This picture does not include Part D which takes the cost to over 24% of their Social Security check this year. Unfortunately, the picture is only getting worse as you can see in this chart from the government estimating retiree medical costs.
Further, Medicare does not pay for long term care and 50% of seniors have less savings that would be required to pay for just one year of care in a nursing home. According to Kaiser, half of Medicare beneficiaries have savings below $61,400.
If you are in the 94% of seniors below $1.1 million in savings, you need a plan and some good counseling to find benefits that may help you pay for healthcare in the future. Even if you have over a million dollars in savings, long term care can significantly reduce the amount you can leave your children or grandchildren – if you do not plan. An experienced elder law attorney can help.