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Summer 2023  Volume 16, Number 2        

This Just In ...

Study Reveals Total Lifetime Medicare Costs

A recent Employee Benefit Research Institute study highlights how understanding your Medicare options is critical to evaluating your total lifetime healthcare costs during retirement.

Retirees typically face two choices for Medicare coverage.

  • Basic Medicare with Medigap: This option pairs basic Medicare (Part A and Part B) with a stand-alone Part D plan and a Medigap policy. Medigap covers cost-sharing, such as deductibles, copays, or coinsurance, but often has high premiums.
  • Medicare Advantage Plans: These plans include Parts A, B, and typically Part D, along with extras like dental and vision coverage. While many Advantage Plans don’t have a premium, they have their own deductibles, copay or coinsurance, and out-of-pocket maximums.

According to the study, a 65-year-old man enrolled in Medigap Plan G needs to save $96,000 for a 50% chance of covering premiums and drug expenses, while a woman needs $116,000. For a 90% chance, it’s $166,000 and $197,000,

respectively for a man and a woman. A couple with high drug expenses would require $383,000 for a 90% chance of covering costs. These amounts reflect average monthly Medigap Plan G premium expenses of $204 plus average Plan D expenses and average life expectancies (which is why the total for women is higher, since they live longer on average).

In contrast, for Medicare Advantage plans, a 65-year-old man needs $56,000, and a woman needs $67,000 for a 50% chance of meeting healthcare spending needs. For a 90% chance, the amounts are $96,000 and $113,000, respectively. When selecting a Medicare plan:

  • Compare the costs of Medigap policies and Medicare Advantage Plans, keeping in mind Medigap often results in fewer out-of-pocket expenses.
  • Evaluate each plan’s deductibles, copays, or coinsurance.
  • Medicare Advantage Plans often have provider networks; basic Medicare with Medigap offers more flexibility.
  • Review Part D coverages for premiums, deductibles, copays, and which drugs are covered.

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In this issue:

This Just In...Study Reveals Total Lifetime Medicare Costs

Use the 4% Rule to Secure Your Financial Future

New DEA Rules Could Reduce Telehealth Access

Why You Should Buy Life and Disability Insurance Together

Biden Administration and Congress Attempt to Secure Future of Medicare




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