Many plan to rely on Medicare. But while original Medicare covers many medical expenses, it has limitations. Medicare Parts A and B cover some health care expenses, but not deductibles, coinsurance, and copayments. Without Prescription Drug (Part D) coverage, Medicare does not cover medications. When you add these costs up, it is estimated that Medicare covers just 50%-60% of retiree healthcare needs.

Medicare Supplement insurance and prescription plans can help bridge the gap by covering some of the remaining costs for things like deductibles, coinsurance and copayments, prescriptions, routine eye exams, and hearing aids. Aon’s Making Sense of Medicare Guide provides an overview of supplemental plan options.

It’s worth noting that Medicare will pay all costs for COVID-19 testing ordered by a doctor or other health care provider, and for services related to testing, such as office and emergency room visits. People with original Medicare who are hospitalized for COVID-19 treatment will incur deductibles and copays, but a supplemental Medicare plan can cover these costs.

Healthcare spending can easily account for a big share of a retirement budget, but Medicare Supplement insurance can help ease the burden. It’s important to start estimating your retirement healthcare costs early so you can create a sound strategy. Supplemental insurance can help preserve more of your retirement assets for other expenses. Our Medicare Health Exchange provides personalized plan options and assistance.

¹ “The Four Pillars of the New Retirement: What a Difference a Year Makes”” An Edward Jones and Age Wave Study, September 2021.