Pantagraph (Bloomington, IL) July 15, 2018
Health care costs are expected to continue to
rise dramatically for retirees.
July 15--Though retirement should be an exciting period of
life in theory, for plenty of seniors, it's a stressful one in practice.
That's because many retirees are caught off-guard by the
expenses they inevitably face. And if there's one expense that's more likely
than not to go up in retirement, it's healthcare. In fact, senior medical care
can be so onerous that in a recent study by Voya Financial, workers listed it
as their single most worrisome expense.
If your client is concerned about healthcare in
retirement, they're clearly in good company. But they should know that there
are steps they can take to ease the burden and take some of the financial
pressure off. Here are just a few.
1. Sign up for Medicare on time
Though Medicare Part A, which covers hospital visits, is
generally free for enrollees, Part B, which covers doctor visits and
diagnostics, comes at a premium. But you can do your part to keep that premium
to a minimum by enrolling in a timely fashion.
Your initial Medicare enrollment window kicks off three
months before the month of your 65th birthday and ends three months after the
month of your 65th birthday. All told, you have seven months to sign up for
Medicare coverage without incurring a penalty. But if you wait too long to
enroll, you could see your premiums rise by 10% for every 12-month period
during which you were eligible for coverage but didn't sign up.
Now there is an exception to this rule. If you're still
covered by a group health plan through an employer (either yours or your
spouse's) by the time your initial Medicare enrollment window rolls around, you
can hold off on signing up without having to worry about that Part B penalty.
Rather, you'll get a special eight-month enrollment period that begins the
month after you separate from your employer or the month after your group
coverage ends -- whichever comes first.
Either way, figure out when you're supposed to sign up for
Medicare. This way, you'll have coverage when you need it and avoid penalties
that add to your costs throughout retirement.
2. Review your drug plan year after year
When you sign up for Medicare, you'll also need a Part D
plan to cover prescriptions. You'll obviously want to research the right plan
initially for optimal coverage, but don't settle on a single plan and stick
with it for the long haul. Plan formularies tend to change from year to year so
that you might get great coverage for the medications you take at one point,
and then get lousy coverage at another. Furthermore, as you age, your
prescription needs are likely to change, so plan on reassessing annually to get
the best coverage at the lowest cost.
3. Take advantage of Medicare's free preventive health
services
Medicare doesn't just want to take your money; it actually
offers a host of free services designed to help you keep tabs on your health.
It pays to take advantage of these services every year, which run the gamut
from depression screenings to diabetes testing. You're also entitled to a free
well visit every year with your doctor, and that's something you'll want to
commit to. Getting ahead of medical issues before they escalate is a great way
to keep your costs manageable, and sometimes, all you need is a little dose of
vigilance to nip health problems in the bud.
4. Invest in long-term care insurance
While doctor visits and prescriptions can be expensive
during retirement, they pale in comparison to the colossal expense that is
long-term care. It's estimated that 70% of seniors 65 and over will need some
type of long-term care in their lifetime, and if you're forced to cover that
expense on your own, it could very well wreak havoc on your finances later in
life. Rather than run that risk, look into long-term care insurance during your
50s or early 60s. At that stage of life, you're more likely to not only get
approved for a policy, but also snag a long-term discount on your premiums as a
result of your good health.
Clearly, healthcare in retirement is a major concern, as
it should be. But if you take steps to lower your costs, you'll make an
otherwise whopping expense just a bit more manageable.
___
(c)2018 The
Pantagraph (Bloomington, Ill.)
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Pantagraph (Bloomington, Ill.) at www.pantagraph.com
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