Taking Note: The Fraying of Medicare

by Maggie Mahar

 

Many Americans assume that once they finally become eligible for Medicare, their worries about skyrocketing health care bills will be over. Unfortunately, that just isn’t the case.    

 

According to Fidelity Investments a 65-year-old couple retiring this year should assume they will need approximately $240,000 to cover medical expenses in retirement--- even though they have Medicare insurance coverage.   This represents a 6.7 percent jump over Fidelity’s 2008 estimate of $225,000.

 

Just as in every other sector of our health care system, Medicare has been hit hard by the soaring cost of care. As a result, Medicare beneficiaries are paying more and more out of pocket. Some health care reformers suggest that because Medicare’s administrative costs are very low, the program is inexpensive. That just isn’t true—administrative costs represent a relatively small portion of total health care spending. As I have explained in earlier posts,  overuse of advanced medical technologies bears primary responsibility for pushing medical bills heavenward.

 

This helps explain why, in just the past seven years,  the amount a retired couple can expect to lay out in the form of co-pays, deductibles, out-of-pocket costs for prescription drugs, as well has certain services not covered by Medicare has jumped 50 percent, from $160,000 to $240,000.....

Taking Note: The Fraying of Medicare