--- title: Medicare Changes and Your Retirement Plan description: Take minute to update yourself on recent legislative changes to Medicare and consider how they may affect your retirement plan. image: http://www.wrapmanager.com/hubfs/blog-files/Medicare_Changes_and_Your_Retirement_Plan.jpg --- [![Assembly Wealth](https://www.letsassemble.com/hs-fs/hubfs/Assembly/logos/Assembly-Wealth-Logo-Orange-500px.png?width=300&height=70&name=Assembly-Wealth-Logo-Orange-500px.png "Assembly Wealth")](https://www.letsassemble.com/) The Money Manager People TM [800-541-7774](tel:+18005417774) [![RESEARCH MONEY MANAGERS](https://no-cache.hubspot.com/cta/default/10700/7ecbcb66-3fbb-41e3-b219-c24fb3c769c5.png)](https://cta-redirect.hubspot.com/cta/redirect/10700/7ecbcb66-3fbb-41e3-b219-c24fb3c769c5) [![Client Center](https://no-cache.hubspot.com/cta/default/10700/8691dcb4-caa3-42c2-a810-77b59f461fd2.png)](https://cta-redirect.hubspot.com/cta/redirect/10700/8691dcb4-caa3-42c2-a810-77b59f461fd2) [Home](https://www.letsassemble.com/) WrapManager's Wealth Management Blog When life changes, we can help you thoughtfully respond. [< Back to read another post](https://www.letsassemble.com/wealth-management-blog) # Medicare Changes and Your Retirement Plan Posted by [ Seton McAndrews | CFP®, Vice President Investments](https://www.letsassemble.com/wealth-management-blog/author/seton-mcandrews) August 26, 2015 - [Tweet](https://twitter.com/share) [![Medicare_Changes_and_Your_Retirement_Plan](http://www.wrapmanager.com/hubfs/blog-files/Medicare_Changes_and_Your_Retirement_Plan.jpg "Medicare_Changes_and_Your_Retirement_Plan")](http://www.wrapmanager.com/wealth-management-blog/retirement-plan-medicare-changes)Back in 2013, [we wrote about the differences between Medicare Parts A and B](http://www.wrapmanager.com/wealth-management-blog/how-does-traditional-medicare-factor-into-your-healthcare-coverage-in-retirement), as well as supplementary coverage options to help readers with their retirement planning. Given recent legislative changes to Medicare, we feel it’s time to revisit the topic. Discussing medical costs and coverage with your financial advisor is wise because medical costs can constitute a sizable portion of post-retirement budgets. As changes are made to programs like Medicare, it’s important to stay abreast of developments and [integrate changes in to your wealth planning strategy](http://www.wrapmanager.com/wealth-management-blog/investment-plans-should-factor-in-rising-health-care-costs). One of the difficult aspects of planning for the future is trying to anticipate unknowns such as medical costs. You never know if you’ll enjoy perfect health in the coming year or if you’ll find yourself at the doctor’s office frequently. Insurance like Medicare helps to temper the risk of the unknown, but you should still be prepared for out-of-pocket costs. ### Out-of-Pocket Healthcare Costs The Employee Benefit Research Institute reported that Medicare pays 62 percent of health care costs for Medicare beneficiaries ages 65 and older. If you depend solely on Medicare to cover your health care costs, you can anticipate spending nearly 40 percent of your expenses out of pocket or with some other type of insurance.1 In addition to preparing for out-of-pocket health care expenses, Medicare beneficiaries also may need to adjust for higher premiums. ### Higher Medicare Premiums Known as the “doc fix” bill,2 the “Medicare Access and CHIP Reauthorization Act of 2015” was passed in April 2015. One of the effects of this bill is higher Medicare premiums for higher-income Medicare beneficiaries. Fortunately, these increased premiums will not take effect until 2018, so people have time to make adjustments in their short-term budgets and long-term retirement planning. Medicare premiums are set on a sliding scale, so people who earn above a certain threshold have already been paying higher premiums than those who earn less. These amounts are determined by IRMAA (income related monthly adjusted amounts). Your IRMAA is based on your modified adjusted gross income (MAGI). The “doc fix” legislation changes three of the five tiers on the income-adjusted scale. Therefore, more Medicare beneficiaries will find themselves paying higher premiums beginning in 2018. As you work through your retirement plan and the ways the Medicare changes will affect your budget, consider changes to supplemental coverage as well. ### Supplemental Coverage When we talked about Medicare back in 2013, we explained the differences between Medicare Part A and Medicare Part B. Essentially, Medicare Part A covers hospitalization and inpatient care, and Medicare B covers medically necessary treatment and services, or outpatient care (doctor’s visits, physical therapy, and so forth). Under the new Medicare changes, supplemental coverage, which is known as Medigap, will no longer pay for Medicare Part B deductibles. This change doesn’t start until 2020, but again, it’s wise to plan ahead for the higher costs in the future. ### Potential Health Coverage Strategies and Options As you discuss these changes with your financial advisor, you may want to consider some of the following solutions to these new challenges: - Take a close look at any employer-provided prescription drug benefits that are available to you. - See if high-deductible health insurance plans may be a cost-effective way to manage your health-related expenses.3 - Discuss the tax advantages of HSAs (health savings accounts) with your financial advisor. Funds are deposited pretax, and contributions are tax deductible. - [Consider location](http://www.wrapmanager.com/wealth-management-blog/relocating-for-retirement-health-care-costs-could-matter). State laws vary considerably in the ways they implement Medicare. For instance, maximum costs for prescription drug Medicare Part D plans cost $12.60 in New Mexico but $171.90 in Florida, according to Kaiser Family Foundation.2 As you can see, there are many different options for funding your health expenses, even if the new Medicare changes alter your original plans. For more information about Medicare changes, or to speak with a wealth manager about other retirement planning topics, call WrapManager at 1-800-541-7774 or [contact us here.](http://www.wrapmanager.com/contact) ---   Sources: 1. [Employee Benefit Research Institute](http://www.wrapmanager.com/hubfs/PDF_Blog_Sources_/EBRI_Medicare.pdf) 2. [FA Mag](http://www.wrapmanager.com/hubfs/PDF_Blog_Sources_/Financial_Advisor_Retirement_Planning.pdf) 3. [FA Mag](http://www.wrapmanager.com/hubfs/PDF_Blog_Sources_/Financial_Advisor_Health_Plans.pdf)   [Retirement Planning](https://www.letsassemble.com/wealth-management-blog/topic/retirement-planning) [Healthcare in Retirement](https://www.letsassemble.com/wealth-management-blog/topic/healthcare-in-retirement) [![A guide to finding a better financial advisor](https://no-cache.hubspot.com/cta/default/10700/202250e7-ef82-4e50-a9c7-25c5bd555f4c.png)](https://cta-redirect.hubspot.com/cta/redirect/10700/202250e7-ef82-4e50-a9c7-25c5bd555f4c) ### Subscribe to Updates [Subscribe to RSS Feed](https://www.letsassemble.com/wealth-management-blog/rss.xml) [![New Call-to-action](https://no-cache.hubspot.com/cta/default/10700/ffe2a394-957b-481b-9f80-4ef176bd6aaf.png)](https://cta-redirect.hubspot.com/cta/redirect/10700/ffe2a394-957b-481b-9f80-4ef176bd6aaf) ### Most Recently Published ### Blog Authors [![Gabriel Burczyk](http://www.wrapmanager.com/hs-fs/hub/10700/file-2347381761-jpg/Athors_Avatars/Gabe-avatar.jpg "Gabriel Burczyk")](http://www.wrapmanager.com/wealth-management-blog/author/gabriel-burczyk) [**Gabriel Burczyk,**](http://www.wrapmanager.com/wealth-management-blog/author/gabriel-burczyk) [Founder & CEO](http://www.wrapmanager.com/wealth-management-blog/author/gabriel-burczyk) [![Valerie De Vol](http://www.wrapmanager.com/hs-fs/hub/10700/file-2457588837-jpg/Athors_Avatars/Valerie-De-Vol-avatar.jpg "Valerie De Vol")](http://www.wrapmanager.com/wealth-management-blog/author/valerie-de-vol) [**Valerie De Vol, **IACCP® Chief Operating Officer](http://www.wrapmanager.com/wealth-management-blog/author/valerie-de-vol) [![Seton-avatar.jpg](http://www.wrapmanager.com/hs-fs/hub/10700/file-2344519198-jpg/Athors_Avatars/Seton-avatar.jpg "Seton-avatar.jpg")](http://www.wrapmanager.com/wealth-management-blog/author/seton-mcandrews) [**Seton McAndrews, **CFP® ](http://www.wrapmanager.com/wealth-management-blog/author/seton-mcandrews)[Vice President - Investments](http://www.wrapmanager.com/wealth-management-blog/author/seton-mcandrews) [![Doug Hutchinson](http://www.wrapmanager.com/hs-fs/hub/10700/file-2347381751-jpg/Athors_Avatars/Doug-avatar.jpg "Doug Hutchinson")](http://www.wrapmanager.com/wealth-management-blog/author/doug-hutchinson) **[Doug Hutchinson,](http://www.wrapmanager.com/wealth-management-blog/author/doug-hutchinson) **[CFA® ](http://www.wrapmanager.com/wealth-management-blog/author/doug-hutchinson)[Director of Research and Trading](http://www.wrapmanager.com/wealth-management-blog/author/doug-hutchinson) ![Katie - square.png](https://www.wrapmanager.com/hubfs/Katie%20-%20square.png "Katie - square.png") [**Katie O'Connor **Director of Client Services](https://www.wrapmanager.com/wealth-management-advisors/katie-oconnor) **Important Disclosure Concerning WrapManager Blogs** Blogs found at this site have been created or supported by WrapManager. The information provided in a blog post prepared by WrapManager or an associated person of WrapManager is generally limited to financial and economic issues, but may include a discussion of general interest items. The views and opinions expressed on this blog are purely the blog authors, and not necessarily those of WrapManager, Inc. Certain blog posts include information pertaining to WrapManager’s investment advisory services and the products and services of unaffiliated money managers. Such information is provided for information purposes only. Accordingly, information provided in a blog should not be construed by any consumer and/or prospective client as a solicitation to effect or attempt to effect transactions in securities or the rendering of personalized investment advice. Any subsequent, direct communication by WrapManager with a prospective client shall be conducted by a representative of WrapManager. Moreover, no client or prospective client should assume content contained on the website serves as a substitute for personalized advice from WrapManager. Different types of investments involve varying degrees of risk, and there can be no assurance that any investment, portfolio or money manager referred to within the blog will be suitable for your individual situation and risk tolerance or will be profitable. WrapManager recommends that you retain a financial professional to provide you with specific guidance regarding your financial situation before investing. Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. Although the information included in the WrapManager, Inc. website and blog has been obtained from sources WrapManager believes to be reliable, we do not guarantee its accuracy and information may be subject to change without notice. This website should not be regarded as a complete analysis of the subjects discussed. Information on this site should not be relied upon as a substitute for legal, tax or accounting advice by a professional in your local jurisdiction. Comments made by third parties are subject to moderation by WrapManager and may not appear on this blog until they have been deemed appropriate for posting. Also, due to the volume of comments received, not all comments will be posted. WrapManager does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party website linked to WrapManager's web site or incorporated within a blog post. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.     ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Seton McAndrews", "url" : "https://www.letsassemble.com/wealth-management-blog/author/seton-mcandrews" }, "datePublished" : "2015-08-26T17:00:00.000Z", "headline" : "Medicare Changes and Your Retirement Plan", "image" : [ "http://www.wrapmanager.com/hubfs/blog-files/Medicare_Changes_and_Your_Retirement_Plan.jpg" ], "mainEntityOfPage" : { "@id" : "https://www.letsassemble.com/wealth-management-blog/retirement-plan-medicare-changes", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://www.letsassemble.com/hubfs/Assembly/logos/Assembly-Wealth-Logo-Orange-500px.png" }, "name" : "Assembly" } } ```