Unexpected Medical Expenses During Retirement: Which Are the Most Common and How Can I Protect Myself?

Reaching retirement age doesn’t always mean leaving all your worries behind. When it comes to health, even though most Americans are eligible for Medicare, there are always unexpected expenses that can come up. Some of these expenses can be very high, representing a financial burden for almost anyone.

Unexpected Medical Expenses During Retirement: Which Are the Most Common and How Can I Protect Myself?

Read below if you are concerned about how you will cover these unplanned medical expenses during retirement. We will go over the most common and high-cost medical treatments retired people undergo in the United States and advice on how to pay for them so that you can plan for these expenses ahead of time and have one less thing to worry about.

Unexpected Medical Expenses During Retirement: Article Contents

Retirement: Securing Peace of Mind

Upon reaching the age of 65, retirement age, many people begin a stage of life that should be relatively worry-free. However, health issues can come up at any time, making it important to have an insurance policy that can give you peace of mind. Upon retirement, most people move from being on their employer’s insurance plan to other programs that can be private or public, like Medicare.

As you know, Medicare is a public health insurance plan that offers free coverage for people over 65 years of age. It has different modalities (Medicare A, B, C and D), each of which are designed to cover different expenses. For example, the cost of medical care, hospitalization or medication.

Yet, Medicare doesn’t cover all expenses, and there are treatments, tests, medication and techniques that are excluded. In addition, there are copays, coinsurance, and deductibles, which users will have to pay out-of-pocket on some occasions, or on others, pay for a portion of the treatment or care. Even so, Medicare is a very attractive option that allows you to ensure that your main healthcare needs are covered. This can be sufficient coverage for many people, but not everyone.

Very frequently, unexpected expenses can arise. In fact, a recent study published by the Franklin Templeton Company found that a third of Americans are more concerned about how they will pay for healthcare coverage during retirement than all other expenses, including the repayment of loans or other payments.

When unexpected medical costs come up, many people are forced to use their savings to cover them. If they don’t have savings, they might even have to go into debt. Either way, you will need the resources to cover these expenses, which can put your financial stability at risk, and in some cases, even cause serious problems in what should be a time of rest and tranquility.

These types of situations happen more frequently than you might think. In addition, there are some expenses that come up for most people and that aren’t covered by ordinary insurance plans. Here are some of the most common:

Most Frequent Unexpected Medical Expenses in Retirement

There are many payments related to health issues that aren’t included in Medicare or similar programs. Here are some of the most frequent:

  • Ear and Eye Exams. Exams and treatments for hearing and vision are very common for people over 65. In fact, according to data from the National Institute on Deafness and Other Communication Disorders, half of Americans over 75 suffer from significant hearing loss. Medicare parts A and B do not cover the most common tests for hearing and vision, unless they are included in other medical treatments. And even so, patients might be required to pay for part of these. Glasses, hearing aids and other hearing devices are also excluded from Medicare A and B.
  • Dental Treatments. Teeth continue to be an issue even in the later stages of life, and expenses derived from these types of treatments aren’t always covered by Medicare. With Medicare A, you might have coverage for some emergency treatments, provided that you are at the hospital. And with Medicare Advantage (part C), you also have some coverage. However, for most people over 65, a visit to the dentist will represent a significant expense. At this age, it’s common to need implants or dentures; treatments which are always costly.
  • Medication. Again, most Medicare plans don’t include coverage for medication, and if they do, they have a copay. The medications covered by the plan can also change, making it a good idea to find out what the best option is for covering the medicine you need.

Supplemental Insurance Plans: Effective Protection

Fortunately, there are several options to help you cover these sometimes costly and unexpected bills. One is to use what are known as supplemental plans, such as the Medigap program. This is a supplemental plan for Medicare that you can purchase from private insurance companies and is available to people who qualify for Medicare A and B. Medigap provides extra coverage that can be used to pay for copayments, coinsurance and deductibles from Medicare. In exchange, the user pays a monthly premium.

Even with this, there are still expenses not included in Medigap, such as long-term palliative care, and hearing and vision treatments.

In order to cover these, it’s a good idea to have a supplemental health insurance plan designed to cover these exact types of unexpected situations.

Supplemental health insurance are specialized policies designed to cover specific medical costs that are very high. There are various types of plans, and some are perfectly adapted to need the needs of retirees:

  • Dental Insurance. These products can be a good option for individuals or families that have recurring dental issues. In exchange for a very affordable premium, you have access to a policy that will cover the majority of the costs of dental treatments. There are usually different levels of coverage, ranging from preventative care to basic care and major surgery. Depending on your needs, it’s a good idea to purchase one of these types of dental insurance.
  • Vision Insurance. Vision insurance provides coverage for periodic exams and glasses or contact lenses. They also offer significant discounts on eye surgery. A good option is to purchase a combined vision and dental policy.
  • Hospital Expense Insurance. An extended hospital stay can imply very significant expenses that are difficult to pay for if you don’t have insurance. Beyond the options available through Medicare and Medigap, supplemental hospital expense insurance is also available. This is the best way to ensure peace of mind in the face of a prolonged hospital stay.
  • Final Expense Insurance. Though these types of policies are usually classified as life insurancefinal expense insurance is also a type of supplemental coverage. It pays for costs resulting from your funeral, which are very high.

As you can see, retirement can also bring unpleasant financial surprises when health problems arise. You can now begin to develop a strategy that will allow you to have the peace of mind of knowing that unexpected medical expenses won’t derail your plans.

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