Nearly 50 percent of adults aged 65 and older in the US have diagnosed arthritis or painful joints consistent with arthritis. Meanwhile, asthma, diabetes, and heart disease are health disorders that are also more common in older-aged adults than in younger people. If you are planning to enroll in Medicare and have a chronic health disorder that requires periodic physician visits, your annual “out-of-pocket” healthcare costs may be far higher than you expected. Therefore, it is important to understand the key reasons that Medicare will probably not cover your entire physician visit bill.
The following describes how two common age-related chronic health conditions can drain your savings, even as a Medicare beneficiary. Additionally, listed below are the four basic categories of “out-of-pocket” costs associated with both Original Medicare and Medicare Advantage.
Diabetes – Healthcare Needs and Issues
Around 23 percent of all adults in the US aged 65-74 are living with diabetes (according to the Kaiser Family Foundation). Not only do adults diagnosed with diabetes need careful blood sugar (glucose) monitoring and frequent physician visits, but nutritionist counseling sessions and medication to control glucose levels are also typically recommended.
The American Diabetes Association (ADA) notes that the average annual cost for diabetes medical care is $16,752 annually per person. Five of the most common diabetes complications that older diabetics develop are:
Retinopathy (eye disorder);
Hardening of the arteries (atherosclerosis);
Transient ischemic attacks (TIAs);
Your Deductible for Medicare Utilization
Part A of Original Medicare covers hospitalization in general, but there is a deductible for each benefit period (per the Centers for Medicare and Medicaid Services [CMS]). Furthermore, there is a separate deductible each year for outpatient services – covered under Part B of Original Medicare. (For example, the standard Part B annual deductible in 2019 was $135.50.) Prescription drug coverage (Part D) under Original Medicare entails payment of yet another deductible before any drug costs are actually covered.
If you decide to enroll in a Medicare Advantage plan, a lower monthly premium is often linked to an annual deductible of $1,000 or more. Besides the annual deductible cost borne by beneficiaries, “out-of-pocket” co-insurance costs usually are payable by beneficiaries of Original Medicare and Medicare Advantage. For Original Medicare enrollees, only 80 percent of the cost per service is customarily covered – but the covered percentage can vary widely between Medicare Advantage plans.
Four Categories of “Out-of-Pocket” Costs to Drain Your Savings
Below are the four primary categories of “out-of-pocket” costs potentially impacting your savings (and especially if you are living with a chronic health disorder):
Your monthly premium cost (which can vary tremendously depending upon whether you are covered by Original Medicare or a Medicare Advantage plan).
Deductibles (costs that are accrued annually before insurance “kicks in” to cover actual expenses).
Co-insurance (the amount for a specific healthcare service that will remain for patient payment after the percentage paid by the health plan).
Medication costs that are not covered (which can depend upon the specific drug utilized).
Consequences of Osteoarthritis – Knee Replacements and Physical Therapy
Physical therapy, steroid injections, and/or knee replacements may be recommended by your physician if you have been diagnosed with osteoarthritis (OA). According to the Mayo Clinic, 10.1 percent of women aged 70-79 (and 7.3 percent of men in this age group) have undergone a knee replacement.
Prior to having a knee replacement, most people experiencing knee pain due to OA receive cortisone injections or other noninvasive treatments. Following surgery, the recovery period can necessitate a week-long stay in a rehab center or home-based physical therapy. In turn, this can result in substantial “out-of-pocket” healthcare costs (for services not fully covered by Medicare).
If you have a chronic health disorder, scheduling a consultation with a Life First Financial & Insurance agent can enable you to choose the Medicare plan and options that will work best for your financial circumstances.