Health care can be a major concern for retirees since healthcare bills are constantly increasing. If you’re a Baby Boomer, be sure to budget for these expenses before they eat up your savings. With longer life expectations and unexpected sicknesses, preparing ahead makes a world of difference. Here are 10 ways to manage healthcare in retirement so that you can enjoy your golden years without stressing about the cost.
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Understand Medicare
Medicare is the foundation of health care for retired people aged 65 or over. It covers Part A (hospitalizations), Part B (medical visits), & Part D (prescriptions drugs). It has a lot of coverage, but it’s essential to know what’s not included, such as dental care, vision and long-term care. Learn about premiums, deductibles & late enrollment penalties to stay ahead of costs.
Evaluate Supplemental Insurance Options
Medicare doesn’t cover everything. Supplemental insurance like Medigap can compensate for the gap in the form of copayments, coinsurance and deductibles. Compare Medigap plans available and check costs and coverage. With the right plan, you can protect yourself from major out-of-pocket expenses in cases of an unexpected medical condition.
Consider Long-Term Care Insurance
The costs of long-term care quickly consume your savings as Medicare doesn’t cover the nursing home stays and in-home care. Such services can be covered under long-term care insurance. Premiums can be expensive. But if you get a policy sooner – in your 50s or early 60s, for example – you will pay less and ensure your financial future.
Build a Healthcare Budget
A healthcare budget makes you well-prepared for regular and unexpected expenses. Include insurance rates, copays, prescriptions, eye and dental care, long-term care expenses, etc. Save money for unforeseen costs and adjust your budget once a year to stay on track.
Explore Health Savings Accounts (HSAs)
When you’re still working and on a high-deductible health plan, contribute to a Health Savings Account (HSA). The triple tax advantages of HSAs include pre-tax contributions, tax-free savings growth, and tax-free withdrawals for qualified medical expenses. These accounts are a financial windfall in retirement – for future healthcare expenses.
Prioritize a Healthy Lifestyle
Preventing illness is the cheapest and best way to cut medical expenses. Regular exercise, healthy eating, & sufficient sleep can prevent chronic illness such as diabetes or heart disease. Take your routine exams and get minor ailments fixed in time so that you don’t have to spend on costly treatments later.
Research Prescription Drug Plans
Cost of medications on prescription drugs can quickly add up, especially when you are retired and taking several drugs. Medicare Part D plans and other prescription plans differ in coverage and cost. Compare plans once a year to make sure you are getting the best deal for your drugs. Be sure to search for generic alternatives or pharmacy discount programs.
Take Advantage of Preventive Care
Medicare pays for many preventative services for free such as screenings, vaccines and wellness exams every year. These services can detect potential illnesses early and save you money on costly interventions. Schedule these appointments as a regular part of your medical calendar.
Plan for Medical Inflation
Health care costs increase over time faster than overall inflation. Make room in your retirement fund for this. A couple of 65 years old retiring today will require more than $300,000 for medical care in retirement, so budget accordingly and check your funds regularly.
Consult a Financial Advisor
Healthcare planning can be intimidating but don’t worry – you don’t have to do it alone. A financial planner can customize plans for you to determine which insurance is right for you, budget and plan for long-term care. Schedule annual visits so you can be aware of any Medicare or other health care changes.
Disclaimer – USA Money Matters does not provide and does not intend to provide financial, investment, tax, or legal advice. Information contained in this article is for informational and educational purposes only. This list is solely the author’s opinion based on research and publicly available information. The inclusion of links to third-party content is not an endorsement by USA Money Matters of such content or services. Use your discretion.