With more sophisticated and effective medical treatments and procedures available in the last few decades, health care costs have risen dramatically. These days, paying for health care out of your own pocket can be tantamount to financial suicide in some circumstances. This means that now more than ever, it is very important that a retiree be able to secure health insurance. To get you started on how to tackle this issue for your retirement planning, we have compiled some valuable information.
A Longer Lifespan Equals a Greater Need for Health Insurance
Thanks to the aforementioned advancements in the medical field, the average lifespan of many human beings have increased over the years. While this should only be seen as a good thing, you should also be aware that this translates to a longer period of time where health insurance is needed. Many people are living thirty years or more past their retirement age. Unfortunately, thanks to the fact that our bodies are more prone to illness and injury, securing health care is more important than ever.
Medical Costs: A Realistic Look
All of this conjecture is nice and dandy, but what exactly does it mean in raw numbers? According to Fidelity Benefits Consulting, a couple 65 years of age who retired in 2011 can expect an estimated $230,000 in medical costs over the years. Not only does this figure sound astronomical, but it doesn't even include nursing home care.
Hard Times for Early Retirees
Retiring early can cause a host of problems. Many retirees plan to utilize programs such as Medicare to help them with medical expenses. But since you cannot apply for Medicare until you're 65, retiring early means you'll be forced to find your own coverage between the time you retire and the time you can apply. If you have health insurance through your employer, it may be able to extend your benefits to cover this gap, but it is possible that it might not continue at all. Even if it does, you may see an increase to your premium or a vast difference between individual and family plans.
Medicare: Insurance For Retirees
A large number of retirees are planning to use Medicare as soon as they are eligible which, for most people, means upon turning 65. This isn't anything new. Retirees have been utilizing this program since its inception. Medicare provides a number of benefits, such as:
Hospital Insurance -- Just as the name suggests, this part of the plan will cover hospital expenses. But it will also cover some home health, nursing facility costs, and hospice care.
Medical Insurance -- For the most part, this will cover physicians and outpatient care. It may also include home health coverage, if you choose not to have Hospital Insurance.
Medicare Advantage: An Alternative
If you're not interested in the standard Medicare plans as illustrated above, another option is to enroll in Medicare Advantage. These plans are maintained by private institutions that contract with Medicare to provide coverage. With this, you will have a number of different plans, just like you would have with a standard type of medical coverage. You'll need to compare several elements of the plan, such as premiums, co-pays, and network providers, among a number of other available options.
Medicare: What's Not Covered
If you're going to apply for Medicare, it's important that you realize what is not covered. If you need coverage for care such as dental, vision, hearing, or even long-term care, you will need to do so independently. Medicare does not include any of these needs.
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