In retirement for a person who is 65 years-old or older, no longer covered by a creditable health plan and is receiving their Social Security benefit, there is no option they must also accept Medicare, or they will forfeit all current, future and even past Social Security benefits.
Thankfully, Medicare, currently, is not that expensive and for those who understand the program, who are properly insured and use the coverage correctly it is also a fantastic system, but, unfortunately there is a somewhat disturbing trend, especially when it comes to prescription drug coverage, better known as Part D.
Over the last 5 years those who have enrolled into Part D plans have had the good fortune to see their premiums, on average, decrease over time.
Since 2014 to the current year, 2018, Medicare Part D premiums nationally have decreased by roughly 0.50 percent.
In 2014 the national average premium was roughly $53.79 a month, while in 2018 the same premium, on average, dropped to $52.52 a month.
There have been a few exceptions to this decrease as states like California, Pennsylvania, Maine, Missouri, New Hampshire, Kansas and Hawaii have seen about a 2 percent increase year over year for the last 5 years.
Offsetting these increases have been states like Delaware, Maryland, Minnesota and South Carolina that have had much larger decreases than 2 percent and for the rest of the country premiums have pretty much stayed stagnant.
Where the disturbing trend happens to appear is for those who actually have to take prescription medications and who have also opted to have a Part D drug plan that comes with a deductible.
Over the same time period the cost of a deductible, on a national average, has increased by roughly 6.20 percent with no state in the country having a deductible that has decreased or even remained stagnant.
In fact, only three states, Arizona, Colorado and Connecticut, have kept their deductible under a 3.25 percent year over year increase, while states like Alabama, Iowa, California, Illinois, Michigan. Minnesota, North Dakota, South Dakota, Nebraska, Texas and Wyoming have experienced over 7 percent increases year over year since 2014.
The issue that many retirees will have to face is the fact that this trend of increasing costs is not projected to stop in the near future for deductibles and even premiums too.
According to the Medicare Board of Trustees (MBT) the deductible over the next 8 years is expected to increase by an average of 5.25 percent through 2026 while premiums, on average, are projected to have an increase of at least 5.50 percent over the same time frame.
With more Americans being prescribed medications to maintain their health a conversation concerning these costs must be incorporated into every financial plan as the expected costs are for coverage appear to be going nowhere but up.
