Friday, November 18, 2016

Reviewing and Budgeting for 2017: Medical

Medical is the category that shocks us the most. Up until just a few years ago, we were pretty healthy. We went to our annual checkups every year and perhaps an occasional appointment for bronchitis in the winter. We were on just a few prescription drugs. Then as you age, it all catches up with you. This is a great reason to make sure that you have saved to be able to pay your medical and dental in retirement.

Our total medical, dental, drugs and insurance for the past 12 months was $ 8458.67 or $ 704.89 a month. Our total for just the 10 months in 2016 was $5734.14 or $ 573.41 a month.

We have a great medical plan but no dental insurance. We have looked into getting dental insurance recently and it wouldn't pay out that much to us in reimbursements when compared to the yearly premium. At our age, crowns and root canals, and bridges have become the normal. Have you ever wondered why so many elderly people walk around with teeth missing? It's because they can't afford the dental expenses.

Of the $ 8458.67 total only about $3168.00 a year is medical insurance for our supplemental Medicare plan. A prior employer reimburses us for the Medicare premium of $208.90(or $104.90 each)a month so we are very lucky to have that benefit. Without it our insurance would cost us $2506.80 more annually.  Medicare is going up to $109.00 per person a month for most people in January 2017. That is a $4.10 per person or $ 8.20 per couple increase per month if we are protected by the hold harmless provision. You can see the charts here. 
 
Considering that people on Social Security did not get a raise in January of 2016 and are only supposed to be getting a raise of .3% in January 2017, this raise in Medicare will be a hardship for some people.

The other $ 5290.67 is dental and co-pays for office visits and hospital care, and prescription drugs. 

In case you haven't noticed this is the biggest spending category we have annually. It is one of the reasons I tell you to save for retirement and especially for medical and drug expenses. I have seen so many people think that Medicare will cover them when they get old. Think again. It doesn't even come close. Without a medical supplemental plan and a drug plan, you will pay a fortune. You need to prepare to pay for both Medicare and Medicare supplement medical and drug plans.

Granted Hubby had a hospitalization this year however only about $300. of the total was for out of pocket co-pays because of it. The cost of insurance, drugs, and co pays has more than doubled since we retired 15 years ago and I expect that pattern will continue. If they go down that will be a nice bonus but I am not counting on it.

So we will try to spend no more than we did this year for these expenses. It won't be easy. And we will try to do some of the things that I talked about HERE 
and HERE.

The most important thing that I want you to take from what I have said is that medical is not cheap when you are elderly so you have to plan for it.

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