Medicare, Social Security and what it means for you. For too many seniors, poverty is a way of life and Medicare won’t keep you out of the “poor house”.
Poverty rates for people ages 65 to 74 climbed from 7.9 percent in 2005 to 9.4 percent in 2009, according to the EBRI analysis of University of Michigan health and retirement study data. For older retirees ages 75 to 84, there was an even steeper increase, from 7.6 percent to 10.7 percent over the same time period. But it’s the oldest retirees who are the most likely to live in poverty: 14.6 percent did so in 2009.
The failing economy is to blame for a lot of this, but failure to plan for things like medical expenses is putting seniors in debt. Medicare only pays a portion of your medical bills, usually about 80%. If you do not have a Medigap plan, you will be expected to pay what Medicare does not.
One of the biggest drivers of poverty in old age is failing health and the associated medical costs. Most retirees living below the poverty line (70 percent) have suffered acute health conditions such as cancer, lung disease, heart problems, or stroke, compared with 48 percent for those above the poverty line, according to health and retirement study data. And almost all senior citizens living in poverty (96 percent) have some sort of health condition, such as high blood pressure, diabetes, psychological problems, or arthritis, versus 61.7 percent of retirees with incomes above the poverty line.
“Medical expenditures go up for the elderly as they age and medical expenses have been rising over the past decade very rapidly,” says Sudipto Banerjee, a research associate at EBRI and author of the report. “A lot of people have to move to nursing homes, and nursing homes are very expensive. People who live there, they lose their income and assets very quickly.”
Medicare was designed as a safety net for seniors. Original Medicare (Part A) only covers hospital expenses. With medical advances it is no longer necessary to provide maintenance medical care in the hospital and more conditions can be effectively treated on an outpatient basis.
Medicare Part A was signed into law in 1965 as part of Lyndon Johnson’s “Great Society”. Medicare Part B, which covers outpatient and doctor charges, covers 80% of Medicare approved charges after you have satisfied your Medicare Part B deductible ($140 in 2012).
One of the best ways to protect your savings is the addition of a Medicare supplement plan. These Medigap plans can cover up to 100% of medical bills approved by Medicare Part A and B but not paid by Medicare.
Georgia Medicare Plans can show you the lowest available Medigap rates and help you find a Medicap plan to meet your needs and budget.