Managing Healthcare Costs in Retirement: A Budget Guide for Virginia Beach Seniors
- Claire Jaramillo
- Sep 10
- 5 min read
Managing Healthcare Costs in Retirement: A Budget Guide for Virginia Beach Seniors
Healthcare costs are one of the biggest financial concerns for Virginia Beach retirees, and for good reason. According to recent studies, the average 65-year-old couple retiring today can expect to spend over $300,000 on healthcare costs throughout retirement – and that doesn't include long-term care.
After helping Hampton Roads seniors navigate Medicare and healthcare costs for over 10 years, I've learned that successful retirement healthcare budgeting requires understanding both the obvious and hidden costs involved. Let me help you create a realistic healthcare budget that protects both your health and your financial security.
Understanding the Full Scope of Healthcare Costs in Retirement
Medicare Premium Costs:
● Medicare Part B: $206.50/month in 2026 (rising 11.6% from 2025)
● Medicare Supplement insurance: $120-180 month depending on plan and insurance company
● Medicare Part D prescription drugs: $0-98+/month
● Medicare Advantage plans: $0-100+/month
Out-of-Pocket Medical Costs:
● Deductibles and coinsurance
● Services not covered by Medicare
● Out-of-network provider costs
● Emergency care while traveling
Costs Medicare Doesn't Cover:
● Most dental care
● Routine vision care and eyewear
● Hearing aids and routine hearing tests
● Long-term custodial care
● Cosmetic procedures
● Alternative medical treatments
Creating Your Annual Healthcare Budget
Step 1: Calculate Your Fixed Costs
Medicare Premiums (Annual):
● Part B: $2,478 (will increase annually)
● Supplement or Advantage plan: $1,440-$2160+
● Part D (if separate): $0-$1176
Step 2: Estimate Variable Medical Costs
Medicare Advantage Healthcare Utilization:
● Primary care visits: $0-50 per visit (depending on plan)
● Specialist visits: $0-75 per visit
● Prescription medications: Varies widely by plan and drugs
● Preventive care: Usually covered 100% by plan
Step 3: Plan for Non-Medicare Costs
Dental Care:
● Routine cleanings and checkups: $200-400 annually
● Major dental work: $1,000-10,000+ for crowns, bridges, implants
● Consider: Dental insurance ($300-800 annually) vs. dental savings plans
Vision Care:
● Routine eye exams: $100-200 annually
● Glasses or contacts: $200-800 annually
● Vision insurance: $120-300 annually
Hearing Care:
● Hearing tests: $100-300
● Hearing aids: $1,000-8,000+ per pair (typically last 5-7 years)
● Consider: Newer Medicare Advantage plans offering hearing aid benefits
Budgeting for Different Health Scenarios
Healthy Retiree Budget (Minimal Healthcare Needs):
● Medicare premiums: $4,500 annually
● Out-of-pocket medical: $1,000 annually
● Dental/vision: $800 annually
● Total: ~$6,300 annually
Moderate Healthcare Needs:
● Medicare premiums: $4,500 annually
● Out-of-pocket medical: $2,500 annually
● Dental/vision/hearing: $1,500 annually
● Total: ~$8,500 annually
High Healthcare Utilization:
● Medicare premiums: $ 4,500 annually
● Out-of-pocket medical: $11,000+ annually
● Dental/vision/hearing: $3,000 annually
● Total: ~$18,500 annually
Strategies for Managing Healthcare Costs
Choose the Right Medicare Plan: Your plan choice significantly impacts your annual costs. Compare total annual costs (premiums + out-of-pocket) rather than just monthly premiums.
Medicare Supplement vs. Medicare Advantage:
● Supplements: Higher premiums, lower out-of-pocket costs, predictable budgeting
● Advantage: Lower premiums, variable out-of-pocket costs based on usage
Use Preventive Care: Medicare covers many preventive services at 100%. Taking advantage of these can help identify and address health issues early, potentially saving money long-term.
Generic Medications: When medically appropriate, generic medications can significantly reduce prescription costs. Work with your doctor to find effective, affordable alternatives.
Shop for Non-Medicare Services:
● Compare dental care costs between providers
● Consider vision discount programs vs. insurance
● Research hearing aid options including online providers
Planning for Healthcare Cost Inflation
Healthcare costs typically increase faster than general inflation:
Annual Increase Planning:
● Budget for 3-6% annual increases in Medicare premiums
● Plan for 4-8% increases in other healthcare costs
● Consider how healthcare inflation affects your overall retirement budget.
Income-Based Medicare Costs (IRMAA)
Higher-income retirees pay additional premiums for Medicare Parts B and D:
2026 IRMAA Thresholds:
● Individual income over $106,000: Additional premiums apply
● Married filing jointly over $212,000: Additional premiums apply
● Surcharges range from $70-419 per month for Part B
● The IRMAA premiums are calculated by cooperation by the IRS, Social Security and
Centers for Medicare and Medicaid Services and are based on the last 2 tax year filings.
Planning Strategy: Since IRMAA is based on income from two years prior, strategic income management can help minimize these surcharges.
Long-Term Care Planning
Medicare provides very limited long-term care coverage:
What Medicare Covers:
● Skilled nursing care up to 100 days under specific conditions
● Limited home healthcare for skilled needs only
● Does NOT cover custodial care or assistance with daily living
Planning Options:
● Long-term care insurance: $2,000-5,000+ annually
● Self-funding: Plan for $50,000-100,000+ annually for care costs
● Medicaid planning: For those who may qualify based on assets and income
Tax Considerations for Healthcare Costs
Medical Expense Deductions:
● Can deduct medical expenses exceeding 7.5% of adjusted gross income
● Includes Medicare premiums, out-of-pocket costs, and long-term care insurance
Tax-Advantaged Accounts:
● HSA funds: Tax-free for medical expenses
● IRA/401(k) funds: Can be used for healthcare but subject to income tax
Virginia Beach-Specific Considerations
Healthcare Costs in Hampton Roads: Our area generally has healthcare costs in line with national averages, but specific factors affect budgeting:
Provider Networks: Understanding which providers are in your Medicare plan's network affects out-of-pocket costs.
Seasonal Residents: If you spend time outside Virginia, budget for potential out-of-network costs or consider nationwide coverage options.
Military Benefits: Many local retirees have VA benefits or TRICARE for Life, which can significantly reduce healthcare costs when coordinated with Medicare.
Tools for Healthcare Budget Management
Track Your Expenses:
● Keep detailed records of all healthcare spending
● Review Medicare Summary Notices for accuracy
● Use apps or spreadsheets to monitor costs against your budget
Annual Budget Review:
● Review during Medicare Open Enrollment
● Adjust based on changing health needs
● Compare actual costs to budgeted amounts
Professional Guidance:
● Medicare brokers for plan cost analysis
● Financial planners for retirement healthcare budgeting
● Tax professionals for medical expense strategies
Creating Your Healthcare Budget Action Plan
Calculate your current healthcare costs
Research Medicare plan options and their total costs
Estimate costs for services Medicare doesn't cover
Build in annual increases for healthcare inflation
Establish a healthcare emergency fund
Review and adjust annually
Getting Help with Healthcare Budget Planning
Healthcare budgeting in retirement is complex because it involves both predictable costs (like Medicare premiums) and unpredictable expenses (like emergency care or chronic illness management).
Call Retha Rish Insurance Agency at 757-692-8388 or email rrish@asb.insure to analyze your Medicare options and their impact on your healthcare budget.
I can help you understand the real costs of different Medicare plans and create realistic budget projections based on your health needs and financial goals. Don't let healthcare costs derail your retirement – plan ahead with accurate information and local expertise.
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