Medicare Beneficiaries Again Face Higher Projected Costs: Study

The model also projects an extreme case, that of a couple with particularly high prescription drug expenditures. These folks will need to have saved $413,000 to have that same 90% chance, up from the $383,000 savings target last year.

Enrollees in Medicare Advantage plans generally have lower savings targets, the report said, although there is significant individual-level variation. 

To ensure a 90% chance of being able to meet health care costs in retirement, a woman enrolled in Medicare Advantage will have to have saved $116,000, and a man $99,000. For couples, the savings requirement is $189,000.

The report noted that tradeoffs exist for people considering Medicare Advantage plans. These often have limited networks, or they may require approval before certain medications or services are covered.

“The results from EBRI’s projection model indicate that basic health care costs incurred by Medicare beneficiaries are high,” Spiegel said. “While the savings targets tend to be lower for Medicare Advantage enrollees relative to Medigap enrollees, there are important limitations to take into account.”