How Much Will You Spend on Healthcare In Retirement?

By L.A.S.

Will Medicare really cover all or most of your health care expenses while you are retired? I witnessed the bills and stress that my parents went through after my father retired, and I am pretty sure that the answer is no.

The most recent surveys of annual out-of-pocket expenses for seniors show that seniors pay anywhere from $3800 to $8300. Again, this is OUT OF POCKET expenses. This does include your premiums for Medicare, which seem to increase every year.
The truth is that seniors spend MORE on out-of-pocket health care expenses than any other age group. Seniors 65 and over spent an average of $4888 per year on out-of-pocket, according to a 2004 study; that included deductibles, copays, insurance premiums, and miscellaneous expenses not covered by insurance.

I might as well take the opportunity to remind you that Medicare does not cover hearing aids, dental care, or vision needs. My mother was actually rather lucky that she had gotten dentures rather early in life and so did not have the rude awakening as to how expensive dental care has become.

Breaking down the senior demographic into smaller divisions shows that the older you are, the worse it gets. Those 65 to 74 spent $3850 a year; those 75 to 85 spent $5060 a year; and those 85 and older spent $8300 a year.

Try to stay out of the hospital. The deductible for a hospital stay under Medicare was $1068 in 2009. If you are unlucky enough to stay in the hospital for more than 60, you will then incur daily charges of $267 a day. After 90 days as an inpatient, those daily charges increase to $534. As a practical matter, the hospital and your doctor will do all they can to get you transferred to an intermediate care facility or released to your home. By an intermediate facility is meant a rehabilitation hospital, a day-care facility, or perhaps an assisted living home.

Medicaid was never intended to pay for long-term care in a nursing home. However, seniors have hit on ways of spending themselves down to poverty-level in a way that allows them to stay in a nursing home they already live in. These strategies include but are not limited to: divorce, transfer assets to children, or setting up irrevocable trusts.

Transferring assets to children is becoming less and less successful with increasing “look-back” periods for determining if you are trying to hide assets. You are subject to a five-year “look-back” period by the state in which you live, and any tangible assets that have been transferred during that time (especially cash, stock, real estate) Medicaid will add to your list of assets.

Seniors eligible for long-term care under Medicaid can keep a house and car, but the house's value is limited to $500,000. The cash assets cannot exceed $2000 for singles and $3000 for couples.

Kucinich Supports Single-Payer Plan

by L.A.S.

With all the news coming out of Washington this week regarding Obama's national health care proposal, it is difficult to focus on just one or two threads for an article or discussion. But one major thread is that Dennis Kucinich is again taking the lead regarding national healthcare, and has come out in support of a single-payer plan.

The alternative news site AlterNet has been very enthusiastic about his version of healthcare reform. You may read their article here: www.alternet.org/blogs/politics/141404/how_dennis_kucinich_may_save_the_health_reform_battle/

Kucinich would allow states to create their own single-payer programs. This is a positive step. However, in the current economic climate, I doubt that many states are in any shape to start up a new public benefit program. Some states, like California, are dropping eligible people from the public healthcare programs that they already have.

Perhaps Obama's plan is meant merely as a transitional phase from the present multi-payer, all-private (except for Medicare) situation to a true single-payer plan such as one finds in many European countries and Canada. I could live with that, but I think that the insurance companies are bound and determined to avoid covering the people that they do not want: those who have pre-existing conditions, and those who run up large bills.

We saw when Medicare first was rolled out as a result of the President Johnson initiative under his "Great Society" programs, that the insurance companies could not dump the seniors fast enough. In fact, they terminated policyholders even before they had been formally enrolled into Medicare! Let us hope that someone has thought to insert verbiage to prevent a similar fiasco this time around.

One approach to reducing the cost of medical care that is not used enough is to manage cases for improved drug therapy (and other management of chronic conditions) so that patients spend fewer days in the hospital. This requires a progressive attitude!

One may read a rather long article on the Nursing Center website about interventions with high-risk or at-risk families on Medicaid, or on a public health plan in other countries. Typically, visiting nurses make regular home visits and help to educate parents and monitor the progress of children in the studies. Overall, such intervention returns about $17,000 per family in the program (they take into account not only hospitalizations that have been avoided, but also crime and domestic violence, and other costs to society: "Cost-benefit analysis of the NFP reveals that there is a $17000 return to society for each family served by the program.13 These benefits were calculated on the basis of the program's impact on societal outcomes such as crime, substance abuse, teen pregnancy, child abuse and neglect, and domestic violence.")

Let's hope that such relatively low-cost interventions will be the norm, and produce better management of childhood asthma and other chronic conditions.