This week I’m talking about how much healthcare will cost in retirement. 

Yesterday, I talked about Medicare 101 - just a few basics to help you better understand medicare plans, costs, and how to plan for it as you approach age 65. So if you missed yesterday, go back and listen to that episode. 

Today, I’m diving a little deeper into the costs of medicare, and addressing a common misconception - medicare is not free! Wait? I paid into that system all my working years...why isn’t it free? 

The truth is that when you turn 65 and enroll in Medicare, you’ll still have deductibles, premiums, co-pays, etc. And there are plenty of other healthcare costs that aren’t covered by your standard medicare plans including dental, vision, and long-term care. 

So let’s look at each part of Medicare, what it covers and what you can expect to pay. 

First, there’s Medicare Part A, which covers hospital stays, skilled nursing, hospice and some home health services. These expenses are mostly covered after you meet your deductible. 

Then there is Medicare Part B, which covers outpatient care and medical supplies — has a standard monthly premium of $144 this year...but you could pay a lot more than that depending on your income. It also comes with a $198 deductible. Once the deductible is met, you typically pay 20% of covered services.

Confused yet? Are you seeing how the costs can begin to add up? 

Medicare Part D covers prescriptions, and as I mentioned yesterday Medicare Advantage and "Medigap" supplemental insurance plans are also an option. 

So there is a lot to consider as you think about and research your options for Medicare. And with healthcare costs being such a big ongoing monthly expense, it’s important to do your homework well in advance and understand how your healthcare expenses are going to impact your overall spending and budget in retirement. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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