estimate of health care costs in retirement

[stocktrader]

I am in the process of estimating my mom's retirement expenses, and I am looking to make a more detailed estimate of what the health care costs will be. She is 70 and is in good health now. Here are my monthly estimates:

Part A - Premiums ....................... $0
Part A - Deductibles/co-insurance... $50 (based on a $2k expense every couple of years)
Part B - Premiums........................ $210
Part B - Deductibles/co-insurance... $50 (based on a $2k expense every couple of years)
Part D - Premiums........................ $75
Part D - Deductibles/co-insurance... $100
Medigap - .................................. $150
TOTAL - $655

These estimates do not incorporate any long-term full-time care (i.e. assisted-living or nursing home). I will do those as a separate computation.

1) What do you think about these estimates? Too high or low?
2) Should I factor in a major expense (like $20,000) every 5-10 years based on a major health event?

thank you

 

[MichaelB]

1) What do you think about these estimates? Too high or low?
2) Should I factor in a major expense (like $20,000) every 5-10 years based on a major health event?

The Medigap premium looks low. Is this based on a quote or were you using an average? I'd use a quote for low deductible Medigap F coverage where she lives.

$20k is a lot when you have good coverage. An emergency fund covering twice this should be more than enough to cover most contingencies, especially if assisted living is funded separately.

 

[aja8888]

Unless she was a recent high earner, the part B premium looks double what it should be.

Part D premiums can easily be as low as $30/month with a $325 annual deduction.

Medigap plans are all over the place on monthly costs based on which plan you choose. Deductibles can be $0 to $1140/per hospital visit. Take a look at the plan costs online.

 

[pb4uski]

For comparison - 2013 for my 94 yo great aunt

Medicare B - $104.90/mo
Medicare D - $43.60/month
Rx deductibles/co-pays - $65-70/month (will vary based on Rx)
Medigap - $212.54/month

Instead of $20k I would factor in her maximum OOP cost assuming a major health event every x years.