Estimating medical costs in retirement

[corn18]

I have been looking at my estimate for health care in retirement and something is off. I retired from the military in 2008 and we have been using Tricare for life since then. Never signed up for employer insurance. I did get dental and vision through work. I went back and looked at our medical expenses from 2011-2020.

2011-2016 we averaged $400 / month for all medical/dental/vision. The kids were both on my Tricare during that time.

2017-2020 we averaged $700 / mo because I was paying my kids premium for Tricare young adult (they could only stay on my insurance until 21 or until they finished college).

During this time, I had 2 heart attacks and bills totaling upwards of $200k. So the Tricare coverage is very good.

I am planning on $500 / mo for medical from now until age 95. Based on historical data, we won't spend that with just the two of us. Tricare costs us $50 / mo. Dental and vision are $70 / mo if we keep it. Tricare costs are capped @ $3,500 / year but even when I had my giant hospital bills, we never came close to that.

Once I go on Medicare, Tricare pays for a supplement, so medical costs should be zero.

So why am I putting $6,000 / year in for medical when I currently spend much less than $6,000 a year? I know things can change, but I don't like planning for unknown unknowns in my base budget. I have a contingency bucket for that.

I know there are a lot of military folks on here, so I wonder what you budget each year. Or anyone with a Medicare supplement.

Thanks,

Corn

 

[CardsFan]

I don't know anything about Tricare, but Medicare costs about $150/mo each. Our supplements cost about the same. So that is over $7k/year, for 2. Add in a drug plan and deductible for MC, and you are pushing $9-10K per year.

So, even if Tricare covers everything else, you are looking at around $4k/year just for Medicare.

 

[corn18]

I don't know anything about Tricare, but Medicare costs about $150/mo each. Our supplements cost about the same. So that is over $7k/year, for 2. Add in a drug plan and deductible for MC, and you are pushing $9-10K per year.

So, even if Tricare covers everything else, you are looking at around $4k/year just for Medicare.

I have medicare premiums accounted for in a separate line item. I do this because it kicks in for me 4 years before my wife, so I just decided to carry it on its own line.

I won't pay for the supplement. That is free as part of TRICARE For Life. So is prescription drug coverage. From the TRICARE For Life website, it says we will have zero out of pocket costs once Medicare kicks in.

 

[CardsFan]

Well, if Medicare is a separate line item, then you are correct the $6k/yr is probably excessive.

Is dental covered also? If so, you are pretty well set regarding HC costs.

 

[corn18]

Well, if Medicare is a separate line item, then you are correct the $6k/yr is probably excessive.

Is dental covered also? If so, you are pretty well set regarding HC costs.

Dental is not covered. But I can get a dental plan through Tricare. Vision as well. For PPO type coverage, it runs $40/mo for dental and $30/mo for vision for the two of us. I'm planning on using that once my Cobra runs out from work.

 

[2017ish]

With TriCare, you are in a different situation from most. I'm also not seeing $6000 a year for insurance and out of pocket (per person), but if you want an ACA plan in most states, that is the toll for just the insurance premium....

(I have non-ACA plan and no real health issues.... Still "budgeted" a sh*tload of money for DW and I on the health front when planning for retirement--but in reality, like long term care, anything unusual would come out of the travel slush fund. If we are sick, we aren't traveling....)