Millions of seniors face hefty debt from expenses not covered by Medicare

Connie Morton’s husband passed away last November due to complications from Parkinson’s disease, which he had been battling for 18 years.

“During that time, there were multiple medical costs not covered by Medicare,” shared the Colonial Beach, Va., resident with Yahoo Finance. “We paid what we could. For the last nine years of his life, he could no longer work. I became his caretaker, and we survived on Social Security and some help from his kids.”

A growing number of retirees, like Morton, are facing healthcare debt due to medical bills. Medicare covers the majority of medical care costs for over 66 million people, but not all.

On average, a 65-year-old who retired last year may need $165,000 in savings to cover out-of-pocket healthcare expenses throughout retirement.

Earlier this year, Morton broke her ankle. “That also added up to significant hospital bills,” she said.

The total medical bills not covered by Medicare for the retired couple amounted to roughly $90,000.

“I’m at a point now where I can’t keep my house because the bills are much too high,” Morton said. “I’m trying to decide what I’m going to do.”

One in 10 people aged 65 or older with healthcare debt owe $10,000 or more, according to a KFF study.

“That is a shocking number,” said Tricia Neuman, senior vice president of KFF. “Some of it is credit card debt, some of it is just debt owed to a healthcare provider or a hospital. Some of it is debt to other family members.”

Consider that half of all people on Medicare live on about $35,000 or less, Neuman added. “So a $10,000 bill, or $10,000 worth of medical debt, can really be unaffordable for people and have serious consequences.”

The bills that lead to the debt typically include routine healthcare services such as lab fees and diagnostic tests, dental care, visits to the doctor, and long-term care services not covered by Medicare, according to KFF. Medicare often requires patients to pay around 20% of their doctor bills out of pocket.

“In-home care for people who are unable to take care of themselves and don’t have family members that can be there 24/7, is particularly expensive,” she added. “It’s a variety of healthcare expenses that can accumulate and result in medical debt.”