When Americans turn 65 years old, they become eligible for federal health insurance provided by Medicare. Considering health care costs make up the majority of a senior’s expenses, Medicare coverage is a huge financial relief for many people. Yet however helpful Medicare can be, it doesn’t cover everything. The following guide from Senior Living Experts can help you understand what Medicare does and doesn’t cover.
What Doesn’t Medicare Cover?
As you plan for the future, it’s essential that you have all the information you need in order to make thorough preparations and well-informed decisions. With that in mind, here’s a list of what medicare doesn’t cover:
Some of these make sense; after all, most people don’t expect federal health insurance to cover elective cosmetic surgery. However, the fact that Medicare doesn’t cover certain things like long-term care and post-mortem medical bills comes as a surprise for many seniors. The truth is that more than half of Americans will need nursing home care at some point, and many of them are underprepared for the expenses.
How Much Does Long-Term Care Cost?
The majority of Americans are wildly unprepared when it comes to covering the staggering expenses associated with long-term care. A private room in a nursing home costs over $92,000 annually, while a semi-private room runs around $82,000. Homemaker services and in-home healthcare can cost $45,000 to $46,000 annually. An assisted living facility puts a person back about $43,500 a year. Adult daycare, meanwhile, is a steep $17,600 annually.
How Much Do Final Expenses Cost?
Final expenses, such as funeral costs and paying off medical bills, can leave a huge financial strain on the loved ones you leave behind. The average funeral with a viewing, burial, embalming, hearse, transfer of remains, and service fees costs between $7,000 and $10,000. Cremation can be more cost-effective, but it can still put your family members back $6,000. Meanwhile, any medical debts you’ve accrued can end up becoming your family’s responsibility after your death if your estate cannot cover them.
Covering Costs Medicare Doesn’t
There are many ways to cover the high costs of healthcare in later years, but two great options are long-term care insurance and final expense insurance. These two types of insurance plans help protect your finances and your family when these costs eventually rear their ugly heads. While they can add thousands of dollars to your current annual expenses, these policies have the potential to cover hundreds of thousands of dollars on medical expenses in the future.
Long-term care insurance can help cover the expenses associated with nursing homes, assisted living facilities, adult daycare, and in-home care. Insurance policies may even help pay for home renovations that prevent falls and injury. The earlier you apply for a long-term care policy, the less your monthly premiums will be. Most insurance providers have a waiting or elimination period before the company agrees to make any payouts to the policyholder.
Final expense insurance (also called burial insurance) is a type of whole life insurance policy that alleviates the financial pressure put on a family after a death. It can be beneficial because it helps pay for expenses you leave behind, such as funeral costs and medical bills. Final expense insurance never expires and even accrues a cash value over time. Monthly premiums tend to be more affordable, as death payouts tend to be less than the benefits of traditional insurance, making this a great choice for those on a limited budget who simply want to afford their family’s peace of mind.
If you own a home, consider selling your home to cover the cost of things like long-term care or assisted living. It’s important to understand the value of your house before you move forward; this way, you’ll have a realistic estimate of what buyers will offer. For many people, this is the best way to have money to cover these costs.
Medicare helps American seniors cover the rising costs of medical care, but it doesn’t pay for everything. Long-term care and final expenses can cost a person thousands or even hundreds of thousands out-of-pocket if they are not prepared, so take action now to protect yourself. Find a plan that will help ease your financial burdens down the road, such as long-term care insurance, final expense insurance, and a better healthcare coverage plan. Planning ahead and taking action as early as possible can help provide a sense of security down the road.
Millie created SeniorWellness as a way to inspire older generations - including her own! - to embrace their wellness throughout their golden years. She hopes her site will help people of all ages feel young at heart. When she’s not playing with her grandkids, Millie can be found writing, taking photos (film or bust!), or putting those skills to use via scrapbooking.
At Senior Living Experts, our advisors work with you and your family to find the perfect fit. Call 773-231-7212.