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Retiree Health Care

Retiree Health Care

September 17, 2019
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Clients are sometimes initially surprised when we ask them questions about their health care insurance premiums, prescription drug costs, deductibles, and dental expenses. However, as we delve further into their out of pocket medical expenses, clients begin to understand the financial planning reasons for doing so. 
 
For a couple in retirement, these expenses can easily average $8,000-12,000 per year. During years in which clients have extensive testing, hospitalizations or dental work, these expenses can move much higher. I have had clients experience $20,000-$30,000 of out-of-pocket medical expenses in a single year. And, given the fact that the standard deduction is now much higher since the 2017 tax act, it is much more difficult to itemize medical expenses on your tax return. 
 
Over and above this, in the early years of retirement, managing Medicare, Medicare supplement, prescription drug and dental can be a time-consuming inconvenience. However, as retirees age, the complexity of managing their healthcare issues tends to increase at the same time physical health is declining. According to a study from the National Council on Aging, 77% of adults over age 80 have at least two chronic health conditions or diseases. Also, individuals age 65-69 years old take nearly 14 prescriptions per year on average, while individuals 80-84 years of age take 18 prescriptions per year on average. This can be a lot to manage.
 
All of this leads to more paperwork from doctors, hospitals, rehab facilities, and insurance providers. A 2016 report on Trends in Healthcare Payments show that 74% of consumers are confused by explanation of benefits (EOB) and medical bills provided to them. This is not without reason; an American Medical Association study found that 7.1% of medical bills have at least one error. It pays to be diligent in reviewing your bills, medical charges and insurance reimbursements.
 
We at Impel Wealth Management do our best to make certain that our client's medical expenses are reviewed regularly and are reasonable for our clients to manage from a cashflow basis. We also partner with other agencies to help make certain that our clients have the correct Medicare supplement, prescription drug and long-term care insurance services coverage that they need.
 
As health care is a major and rising cost within our client's retirement plans, we pay particular attention to helping clients build and manage their financial resources so that they can provide for their health care needs and live with dignity and independence. If you need help advocating for yourself or managing these complex issues, please reach out to us for a discussion. It is an important topic that needs to be addressed in a proactive way as we continue "Moving Life Forward" for our friends and clients.