Learn This Guide to Senior Health Benefits – Options and Costs

The United States spends twice as much on health care as the rest of the industrialized world. In reality, each year, 18% of our GDP is spent on supporting the country’s healthcare systems. The proportion of the US GDP spent on health care for people 65 and older exceeds 5%, a figure that is anticipated to double by 2030 and treble by 2050.

Seniors may find it difficult to afford rising healthcare costs when their income declines.

According to a recent Employee Benefit Research Institute (ERBI) study, a US couple retiring in 2017 at the age of 65 required $280,000 in savings to meet future medical bills. The $280,000 includes Part B doctor and Part D medication coverage premiums.

It excludes long-term care and assisted living.

Seniors who do not have enough funds must struggle with medical bills. The vast bulk of senior health care, however, is paid for by private insurers and government programs such as Medicare, Medicaid, and the Veterans Administration rather than by seniors themselves.

These private and state programs cover the vast majority of doctors, hospitals, assisted living facilities, nursing homes, prescription pharmaceuticals, and end-of-life care used by America’s 40.3 million seniors, or 13.4% of the population.

Medicare

Medicare is a federal healthcare program for those over the age of 65 who have worked full-time for at least ten years. Medicare is supported by a 2.9% payroll tax applied on all employees and employers, monthly premiums paid by participants, and government spending. 

(As of January 2013, an additional 0.9% tax is paid on persons whose income surpasses certain thresholds: $250,000 for married filers filing jointly and $200,000 for single filers.) 

Medicare is divided into four parts:

• Part A, which is free for the majority of individuals, pays for hospitalization, skilled nursing facility care, hospice care, and some home health care.

• Part B, which costs around $100 each month, covers outpatient treatments like doctor visits, lab testing, preventative care, some surgeries, clinical trials, mental health care, and durable medical equipment and supplies.