According to consumer-spending data captured by the Bureau of Labor Statistics, as of 2020, individuals over the age of 65 were spending an average of more than $6,600 per year on healthcare. That does include insurance expenses, which many people cover as a way to help reduce their overall medical spending for the year. But are there ways that older adults on potentially limited incomes can get help covering medical expenses or otherwise reduce their healthcare costs?
Seniors in the Kansas City area (and across the nation) do have some options. Check out the list below to get started.
If you have enough medical expenses racked up for the year, you may be better off itemizing expenses if you're required to file a tax return. That means you use the total of your allowed deductions instead of taking the standard deduction.
You can only deduct up to 7.5% of your adjusted gross income for medical expenses, though. So, if you have an income of $50,000, that would be $3,750. It's important to add up all your deductions, including medical expenses, to see if they total more than the standard deduction. Otherwise, itemizing might not be the best option.
Medical expenses that are deductible could include payments made to qualified providers for both medical and dental services as well as premiums paid for Medicare and other health insurance. Deductions can get complicated, so seniors may want to consult a tax professional if they have a lot of medical expenses to consider.
Older adults that have limited incomes and don't have a lot of countable assets may be able to qualify for programs that help cover the cost of Medicare premiums. There are four Medicare Savings Programs that you might qualify for:
If you haven't yet reached retirement age or you're in the early years of retirement, you might want to look into options for long-term care coverage. These plans are designed to cover costs that Medicare and other insurance programs don't, helping to pay for caregivers or assisted living communities.
Long-term care insurance can be a complex topic, so consider speaking with an insurance or financial expert about your goals and needs as you plan.
Seniors who have plenty of equity in their homes may be able to cover unexpected medical expenses with a reverse mortgage. A reverse mortgage lets you take the value of your home out in cash either in one loan payment or a regular income payment. The money doesn't have to be paid back as long as you or your spouse are still living in the house.
Once you move out, the house can be sold. The proceeds from the sale can be used to cover the loan. Reverse mortgages can have pros and cons, so talk to your financial advisor or broker to ensure you are making a well-educated decision if you decide to use this tactic.
One of the best ways to reduce medical expenses is to proactively care for your health. In an assisted living community like The Gardens at Barry Road, residents can benefit from holistic wellness and lifestyle amenities. That includes nutritious meals designed to promote good health as well as help with monitoring chronic conditions, managing medication and getting the right kind of exercise. All that can add up to keep you out of doctor's offices and emergency rooms more, which reduces how much you may pay for healthcare services each year.