Reader’s Question: My wife and I are both 63 and are going to retire in 14 months. Our biggest worry is healthcare. I used to think that Medicare paid everything. Boy was I wrong! Can you please give us an estimate of the expenses, and some suggestions for cutting costs? –Stanley K
Scott Hanson: Healthcare is among the biggest costs of retirement. And a mistake a lot of people make is assuming that Medicare will cover everything.
You’re definitely not alone there.
The problem is that healthcare is more expensive than ever, not only because people get sick, which they do, but because people are living a long time. An injury or fall here, hearing aids, medications for chronic conditions, in-home care, and then there’s cataract surgery, and these costs compound and layer over the years.
On average, couples retiring today can expect to pay $260,000 over the course of their retirements. (This is the average for a retired couple earning less than $170,000 a year.) 
So, generally speaking, where does all that money go?
Beginning in 2019, if your combined yearly income is $170,000, or less, you’ll pay 25% of the cost of benefits for Medicare part B (medical services and supplies) and D (prescription drug coverage). But if your income is higher (there are several tiers), you can expect to pay more, running all the way up to 85% (of the cost of your benefits) for parts B and D if your combined income is over $750,000. 
This is in addition to the monthly premium amounts (for parts B and D), which, depending on your income, can run anywhere from dozens to hundreds of dollars per month. All that, and in certain circumstances, you might (depending on how many quarters you paid Medicare taxes) even be required to pay Part A premiums, as well.
Simply, when it comes to healthcare/Medicare, the more you earn (and the longer you live), the more you are likely to pay.
I recommend you think of Medicare, not as a government program, but as just another insurer; a quasi-business that’s attempting (however inconsistently) to contain certain costs while other expenses run wild.
For instance, Medicare doesn’t cover:
When it comes to certain drug therapies and devices, Medicare’s non-blanket coverage means that while you (and your doctor) might deem a certain treatment integral to your well-being, Medicare—much like some private insurers—might not see it that way. (Meaning, you may either be forced to pay 100% of something to receive the care, or you’ll have to go without.)
Then there’s long-term care, which is arguably the biggest health expenditure of all. The median yearly out-of-pocket cost of a private room in a nursing home is $100,000. 
Medicare pays none of it.
It would be impossible to detail all the healthcare and Medicare variables in a single article. (For a complimentary analysis of your financial situation, and possible retirement healthcare expenses, contact us today.)
That said, here are four things you can do to help minimize your retirement healthcare costs.
If you’re going to have to pay a private physician out of pocket for a type of therapy or care (which is likely), you can negotiate the price. (A lot of Baby Boomers are uncomfortable with negotiating for healthcare. Well, I encourage you to get comfortable with it because talking to your doctor about price can, over the course of your retirement, save you tens of thousands of dollars.)
2) Hire a “Care Manager”
Some people actually pay “healthcare consultants” or “care managers” to do their lobbying and navigate the medical system for them. (I expect this to become more popular in the coming years.) At first glance, having a personalized consultant, someone who is familiar with your medical history (usually a retired nurse who knows medicine and our healthcare system), might seem extravagant. But having a bedside advocate to approve treatments (eliminating duplication and unnecessary procedures), advocate for you, and keep costs in check, may not only save you serious money, it could save your life.
3) Consider long-term care insurance
While expensive, a 70-year old can currently buy long-term care insurance for about $7,500 a year. This would mean a payout of almost $40,000 a year for three years of care. 
4) Exercise and be social!
From getting your flu shot to walking for 30 minutes a day to getting out and socializing, no one plays a more important role in keeping your healthcare costs down than you.
Consider what walking 30 minutes a day does: It lowers your blood pressure, strengthens your muscles and bones, helps you lose weight, increases blood flow to your brain, relieves stress and improves balance.  And as for being social, nurturing close friendships is a terrific way to fight depression. 
That’s certainly a lot to consider.
As you may have heard us say during any number of Money Matters broadcasts: When it comes to retirement and healthcare, my experience has been that the more planning you do, the better off you’ll be.