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Medicare has been around since 1965, providing health insurance and other services to those Americans who are age 65 and older. Some younger people with disabilities may also qualify. Each year, the Medicare program pays benefits to millions of people and has been invaluable in helping older retirees handle those health issues that often crop up as people age. As baby boomers continue to age, more and more will need this service. Current reports show about 45 million U.S. retirees are enrolled in the Medicare program, and The National Academy of Social Insurance projects that number to reach 80 million by the year 2030.
Medicare is now working with major health care providers who do the actual chore of providing the benefits. These benefits can include regular testing such as colon screenings, mammograms, physicals and other preventative health screenings.
Though the program has provided financial confidence to millions of older individuals who need good, regular medical care, an increasing number of people are finding out that there is a limit to what Medicare will pay. This is especially true for those who require long-term care.
Medicare Part A covers health care up to 90 days per admittance in instances where the patient is expected to make a full recovery and return to their everyday life. But, what if the patient will require care throughout the remainder of his or her life? Many older retirees are finding out the answer to that question the hard way, through their own experiences.
The Medicare benefit amount that will be provided often depends upon a wide range of factors such as the type of facility the patient is in, whether there is other insurance, physicians' fees, the location of the facility and many other variables. A prospective payment system is used for nursing home care, and in this instance, an institution receives a predetermined, fixed amount based on a classification system of that service. This may not be enough to cover all expenses.
Many long-term illnesses can drain a family's savings. Even if an individual has made every effort to lay aside substantial assets for their retirement years, the money runs out quickly with catastrophic illnesses. These facts have led financial income planners to approach the topic of retirement income planning a bit differently.
Doug Wright at Wright Choice Financial Group LLC in Bedford, New Hampshire has this advice for retirees: "Things have really changed across our country. It's not enough anymore to simply plan for retirement with investments and 401(k) plans. True retirement income planning must take into account all the various life events that could occur.
"Many folks already know that Medicare doesn't pay for vision or hearing aids. If an individual has a stroke at 70 years old and lives to be 85 or, if one or both spouses have a cognitive condition like Alzheimer's or Parkinson's, the monthly budget will need a major adjustment."
Millions of older retirees are faced with these issues each year. With medical technology increasing, many people are living longer than in the past. While Medicare will pick up the tab for many basic tests and doctor visits, the individual may be left with significant medical expenses. Therefore, they need a strategy- possibly the addition of long-term care insurance - to make sure these expenses are covered.
Wright concludes by saying, "The cost of medical care is on the rise. Though people are living much longer these days, their lifestyle may suffer unless they plan for the potential of these types of unexpected life events."
Guarantees are backed by the financial strength and claims-paying ability of the issuing company and may be subject to restrictions, limitations or early withdrawal fees, which vary by the issuer. They do not refer, in any way to securities or investment advisory products. Annuities are sold only by prospectus. You should consider the charges, risks, expenses, and investment objectives carefully before entering a contract. A prospectus containing this and other information about the insurance company can be obtained from your financial professional. Read it carefully before you send money. Annuities are not FDIC insured.