If you’re one of the 44 million Americans who are covered by Medicare, be on the lookout for your new Medicare card coming soon in the mail. It will no longer carry your Social Security number.  Instead, it will carry a new 11 digit identifying “number” consisting of both numerals and letters.

But it’s still a paper card. While everything else in America has gone digital, Medicare still requires you to carry a card to present at your physician’s office.  Since the cards will start arriving in the mail during the month of April – a process that will continue throughout the year — you can expect to be asked for it at all your medical appointments starting soon.

Cards are being mailed to your registered address on your Social Security account. So if you have direct deposit of Social Security benefits, you should check to make sure they have your current mailing address, which might have changed since you set up your account.

A warning: Do not fall for telephone scams asking for your new number.  Give it only to the physicians and hospitals you know – not to someone posing as a medical professional.  The mailing of 44 million cards is an opportunity ripe for scams!

To learn more about the card, go to www.Medicare.gov and in the search box, type “new card.” 

Senior Healthcare Costs Continue to Rise

Speaking of Medicare, there’s new evidence that Medicare alone will not be sufficient to cover your retirement healthcare costs. Fidelity has just released its annual Retirement Healthcare Cost study, and they estimate that a 65 year old couple retiring this year will need $280,000 to cover healthcare and medical expenses throughout retirement.

(For single women the retirement cost estimate is $147,000 versus $133,000 – reflecting the fact that women live longer than men.)

This year’s number is a 2 percent increase from 2017 – but a 75 percent increase from Fidelity’s first cost estimate in 2002. And if you extrapolate, even at the current relatively low rate of inflation, retirees could find their healthcare costs doubling over a twenty year retirement period.  That’s a critical piece of information when planning retirement budgets and needed withdrawals from retirement accounts.

The costs covered in this survey include Medicare premiums, out-of-pocket drug costs and the estimated costs of Medicare supplements, which cover deductibles, co-payments, and some other non-covered Medicare expenses. All of these costs are susceptible to future inflation, federal budgetary decisions, and legislation.

One way to reduce these insurance costs is to choose the all-in-one Medicare Advantage program available in your area. But then you are restricted to hospitals and physicians included in your plan.  If you later develop an ongoing medical condition, you may not go back to the best supplements offered to those in traditional Medicare.  So, it’s important to think ahead when choosing Medicare Advantage over traditional Medicare plus supplements.

The survey also includes a warning to those who consider retiring early – or might be forced into early retirement by illness, or a spouse’s medical situation. Those who retire before qualifying for Medicare pay at least $500 – or significantly more — in private health insurance premiums monthly. That doesn’t include the cost of deductibles or copayments with these policies.

One thing Fidelity’s cost estimate does not include is the significant costs of long term “custodial care.”   In recent years, more seniors have opted for attractive assisted living facilities.  But the Genworth  annual survey  shows that the average annual cost of an assisted living facility in a city like Chicago is now $4695 a month, with a private room in a traditional nursing home costing over $8500 per month!   These charges have consistently risen faster than inflation.

As more seniors in the baby boom generation search for care, you can be sure that all medical costs will rise above traditional inflation. And state Medicaid budgets will be strained to provide even basic care – likely not something you would choose for yourself, or your parents.

Retirement planning is no longer about budgeting for travel or leisure activities. Sadly, increasing longevity must be equated with increasing medical costs. And that’s The Savage Truth.