Mar 11, 2024
When it comes to retirement planning, one of the the most common areas of concern is the possible medical expenses that loom on the horizon.
From unexpected illnesses to the prospect of long-term care, the anxieties are real for seniors, as reflected in a new survey from Nationwide.
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The survey of 1,000 U.S. residents of retirement age found that, when it came to health costs in three different categories, respondents reported that they’re most worried about Medicare/Medicaid cuts (83%), general health care expenses (77%) and long-term care expenses (73%).
Those fears aren't unfounded, either. Research from RetireGuide showed that the national annual median cost for private rooms in a nursing home is $108,405.
If you’re worried, here are three steps you can take now to fend off the financial fears and face the future with far less stress.
1. Start a Health Savings Account
Just like an IRA or 401(k), a Health Savings Account or HSA can grow funds tax-free.
You can withdraw at any time to cover qualified expenses, in addition to deductibles, co-payments and co-insurance. In addition, you can sign up when you belong to an HSA-eligible plan (sometimes called a High Deductible Health Plan, or HDHP).
HSA signup is offered through banks, credit unions, and other financial institutions.
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2. Enroll in Medicare and supplement it
Once you are enrolled in Medicare (the federal health insurance program for people 65 and older), you’ll be covered for a range of possible expenses, from inpatient hospital stays to hospice and home health care.
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However, you’ll have to pay a premium to participate in Medicare Part B, which covers doctors' services, outpatient care, medical supplies, and preventive services. Then, take it a step further and consider supplemental insurance.
Those purchased through Medigap or Medicare Advantage can help cover the out-of-pocket costs beyond Medicare. The website will help you locate a policy plan in your area that works for you.
3. Shop around for a doctor
The health care marketplace works a bit like shopping for milk at three different supermarkets that prices it at $3, $17 and $220.
The website ClearHealthCosts, founded by former New York Times journalist Jeanne Pinder, allows you to research procedure prices based on zip code.
If you can’t find what you’re looking for, do some good old-fashioned legwork and call around to doctor’s offices or friends and family to identify smart options.
Urgent care and walk-in clinics offer a price-conscious alternative — especially compared to emergency rooms. They also come in handy when a primary care physician isn’t available.
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Lou Carlozo is a freelance contributor to Moneywise.
