It’s an unfortunate fact of life: As we get older, our health-related expenses go up. Even with that in mind, many retirement-age people are greatly underestimating what health care will cost them in the years ahead.
In a recent Mutual of Omaha survey of consumers 60 and older who are not currently enrolled in Medicare, two-thirds say they expect their healthcare costs to be less than $3,000 per year once they enroll.*
However, according to the Bureau of Labor Statistics, they can realistically expect to pay, on average, $6,874 for their premiums, copays and out-of-pocket expenses in 2023.** That figure is predicted to increase, at minimum, at the same rate as inflation in years ahead.
To minimize that widening gap, many Medicare recipients turn to Medicare supplement insurance — or Medigap — to cover the 20% of medical expenses not covered by Medicare Parts A and B.
“As the cost of out-of-pocket medical expenses continues to increase, Medicare supplement insurance can play an important role in the lives of retirees who are looking to make their money go farther,” said Mutual of Omaha Senior Vice President of Brokerage Sales Randy Mousel.
Because the cost of Medicare supplement and other types of private insurance and the benefits they offer can vary greatly, Mousel advises people to start by evaluating their needs and understanding the basics of Medicare before purchasing a plan.
“For retirees on a fixed income, it pays to know your options,” he said. “When it comes to Medicare coverage, a little knowledge can go a long way.”