AAII Survey: Are Individuals Supplementing Their Medicare Coverage?

The average retiree spends around $4,300 per year on out-of-pocket health care costs, according to a study from the Center for Retirement Research at Boston College, and that doesn’t include long-term care. Medicare will help cover some costs, but coverage is far from free, and you’ll still face some out-of-pocket expenses. Original Medicare includes Part A and Part B coverage. Part A covers trips to the hospital and other types of emergency care, while Part B covers doctor visits and some other preventative services. Prescription drug coverage isn’t covered within Parts A or B, so many enrolled in Medicare turn to supplemental coverage. Although an overwhelming majority of Americans do in fact supplement their coverage, we aimed this week to see what types of supplemental plans they were enrolled in.

We asked our members about their approach to Medicare with the question:

Are you currently supplementing your Medicare coverage, or do you plan to?

Here are the results:

1,867 members participated in this survey.

The results speak for themselves. Given the rising costs of health care and the demand for prescription, vision and dental coverage in retirement, it’s not surprising to see that 85% of respondents reported supplementing their Medicare coverage.

Follow-Up Special Question

Obviously, additional coverage is in high demand. After all, supplemental plans shield millions of people from Medicare’s deductibles and out-of-pocket costs. We aimed to hear what specific approaches members were taking to supplement their Medicare.

We followed up our poll with:

If yes, what additional coverage are you enrolled in and why?

We received nearly 600 responses. We grouped supplemental coverage plans into three types: employer-subsidized plans, private insurer plans and additional Medicare plans. Regardless of the group, nearly all of the respondents cited high prescription costs and/or a need for vision and dental coverage as reasons for supplementing their Medicare plans. Forty-eight percent of respondents stated that they supplemented with an additional Medicare plan, and nearly half of those reported having Medicare Advantage. Close to a third of respondents said they had full or supplemental coverage through a previous employer, and for most of this group it was included in their retirement package. Finally, 22% said that they supplemented their Medicare coverage with private insurer plans.

Here is a sampling of the responses we received to the follow-up special question:

• “Tricare for life, as a retired veteran it is an unbeatable benefit.”
  
  
• “Wisconsin Employee Trust Fund Medicare Plus plan through spouse’s retirement contract. He earned insurance credits that will cover the premium for me through approximately the next seven years.”
  
  
• “Medicare supplement insurance for both my wife and myself. Medical costs keep going up, no matter what the politicians promise.”
  
  
• “My wife retired from the WA Community and Technical College System and is eligible for a state-subsidized plan that covers both of us and would cover me if she were to pass away before me. The plan meets our needs very well and, although we pay a hefty premium, we have few out-of-pocket expenses save prescription co-pays and small deductibles.”
  
  
• “HMSA—best plan available in Hawaii that is a PPO plan. Medicare doesn’t cover enough. Sad that one pays through working career and still has to pay in retirement. Medical costs have no controls, prescription costs are totally out of control.”