Estimating Maximum OOP Healthcare Costs in 10 Years at Age 65

[MercyMe]

In an attempt to "plan for the very worst", I'd like to plug into our planning spreadsheet a maximum out-of-pocket expense for our healthcare costs once we get on Medicare in 10 years. I know this question can't be answered with any believable degree of confidence because of politics, inflation, and all of us having an imperfect crystal ball. I'm just looking for something slightly better than my current wild guess.

My plan is to...

1. Find today's cost of a supplement plan with a reasonable maximum out-of-pocket expense.
2. Add that to the cost of Medicare Part B.
3. Add in the dollar amount of the maximum out-of-pocket payments.
4. Add in a bit of IIRMA since we'll be doing Roth conversions in most of those 10 years.
5. Add an expense for vision and dental.
6. Sum this all up and then double that total since it's for me and my spouse.
7. Inflate that total by 6 to 8% each year for 10 years.

Again, this is to plan for the absolute worst.

Is this even remotely sensible to think about doing?
Should I add more to the total to plan for any procedure or medication that is not covered (ie "experimental" meds)?

 

[audreyh1]

The only Medicare plans I know of that cover vision, dental etc. are Medicare Advantage plans, not traditional Medicare plus supplement.

 

[MichaelB]

If you really want to to plan for the worse, assume no subsidy for Medicare B. It currently enjoys a 75% subsidy before including IRMAA.

 

[MercyMe]

The only Medicare plans I know of that cover vision, dental etc. are Medicare Advantage plans, not traditional Medicare plus supplement.

OK. I've edited my post to reflect this.

 

[Sarah S]

My medicare supplement has optional add ons for dental and vision/ hearing the dental pays for prevention and I think 1500 a year for other work with coinsurance. Vision covers refraction and some towards glasses. I haven’t looked into the hearing part. This is in Massachusetts. You would have to look at your state medigap plans

 

[Sunset]

Might as well just estimate $5,000 pp/yr and an inflation rate of 5%. Will be as accurate as anything else.

Outlier will be development of rare disease that is not covered, then cost will be ~$1->$2 Million per year.

 

[Fermion]

Might as well just estimate $5,000 pp/yr and an inflation rate of 5%. Will be as accurate as anything else.

Outlier will be development of rare disease that is not covered, then cost will be ~$1->$2 Million per year.

Which rare diseases are not covered?

 

[COcheesehead]

In an attempt to "plan for the very worst", I'd like to plug into our planning spreadsheet a maximum out-of-pocket expense for our healthcare costs once we get on Medicare in 10 years. I know this question can't be answered with any believable degree of confidence because of politics, inflation, and all of us having an imperfect crystal ball. I'm just looking for something slightly better than my current wild guess.

My plan is to...

1. Find today's cost of a supplement plan with a reasonable maximum out-of-pocket expense.
2. Add that to the cost of Medicare Part B.
3. Add in the dollar amount of the maximum out-of-pocket payments.
4. Add in a bit of IIRMA since we'll be doing Roth conversions in most of those 10 years.
5. Add an expense for vision and dental.
6. Sum this all up and then double that total since it's for me and my spouse.
7. Inflate that total by 6 to 8% each year for 10 years.

Again, this is to plan for the absolute worst.

Is this even remotely sensible to think about doing?
Should I add more to the total to plan for any procedure or medication that is not covered (ie "experimental" meds)?

It’s going to give you a number. I did something similar and I was wildly high which I guess is your intent. You may want to subtract any HSA money because that is money already set aside for medical.

 

[ERhoosier]

A decade is a fairly long 'cone of uncertainty' for health cost planning these days so I would update that spreadsheet annually. HSA balance can be used to help meet future health expenses, but remember under current rules those funds cannot be used for ongoing Medigap premiums.
If you want to plan for 'worst case', don't forget long term care expenses which are not covered by Medicare nor most Medigap policies. Think Long Term Care insurance, but that is very expensive if applying for new coverage at age 60-65+.
IMHO- Figuring $5k/yr (individual) plus inflation would be bare minimum, since that just approximates 2026 base Medicare premiums + copays + a Medigap supplemental policy. IRMAA can raise that premium cost by $97-$467/mo (inc. Part D, depending on income threshold). Then there are always uncovered medical expenses to consider, and who knows what those may be a decade from now.

 

[RetiredHappy]

The issue is that many of the biologics that you see on TV, Skyrizi etc are not covered by Medicare, meaning they are not part of the formulary in any Part D. You pay the unsubsized rate which can be $10K to $20K per injection, 4 times a year or so. All these pharmaceutical companies typically have an income-based charity program where if you submit your income and expenses, they may provide the drugs to you for free if you are considered as being low income. Many of us on this forum would typically not qualify for it. If you are unlucky like me who have a host of autoimmune disorders, you are shxx out of luck comes Medicare age.

You can plan for the maximum OOP healthcare costs all that you want, in reality there is really no maximum that you can plan for.

 

[jim584672]

A Medigap G plan should cover most costs, less the Part B deductible (currently $283).

 

[Ozz]

Medigap plan premiums vary from state to state. Current Part B premium plus Medigap Plan G in WA is approx $450. Part D premium needs to be added in and then plan on whatever copays may be required for drugs.