Seniors will need less money to cover their health-care costs this year than they did last year. But retired couples will need a combined total of $386,000 in healthcare savings to afford them over their lifetimes, according to a report by the Employee Benefit Research Institute (EBRI).

The report, “A Bit of Good News During the Pandemic: Savings Medicare Beneficiaries Need for Health Expenses Decreases in 2020,” examines the savings needed to pay for premiums for Medicare Parts B and D and Medigap Plan G, as well as out-of-pocket spending for outpatient prescription drugs. 

Medicare generally covers only about two-thirds of the cost of health care services for beneficiaries age 65 and older.

This year, Medicare Trustees reduced projected costs for Medicare Part D premiums and out-of-pocket expenses by 10% - the lowest EBRI said it has recorded since 2013, when needed savings declined between 6% and 11%. EBRI said in a press release that the primary reason for the decrease was related to an annual adjustment associated with prescription drug use.

While every little bit helps, this year’s 10% decrease will not significantly reduce the amount of healthcare savings needed to cover most seniors’ annual medical expenses, EBRI said. A male and female couple will need $386,000 this year to afford their combined annual medical expenses in full, even with a 10% reduction in cost over last year.

“Americans should consider that even with this decline, the amount needed to supplement Medicare is still significant, and that they will likely need more savings than cited in this report,” Paul Fronstin, Ph.D., director of the Health Research and Education Program at EBRI and co-author of the study, said in the news release. 

According to Fronstin, so will retirees who incur long-term care and other health expenses not covered by Medicare. So will individuals who retire before the age of 65.

While Medicare Trustees make small changes to Medicare program costs, EBRI said that policymakers are poised to make sweeping financial changes to the program as a whole through solutions that will shift still more responsibility for healthcare costs to beneficiaries, many of whom already are struggling to afford them.

A copy of the issue brief, “A Bit of Good News During the Pandemic: Savings Medicare Beneficiaries Need for Health Expenses Decreases in 2020,” can be found at

Founded in 1978, the Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in Washington, D.C., that focuses on health, savings, retirement, and financial security issues.