How do i plan for health care bill after retirement?
Posted by Dolores
prince_0102 asked:
I recently read an article on MSN that health care after retirement is costing close to ~250k despite medicare and is growing at at brisk pace of 6-7.5% a year.
I recently read an article on MSN that health care after retirement is costing close to ~250k despite medicare and is growing at at brisk pace of 6-7.5% a year.
How do i plan for this in my retirement plan ? This kind of expenses will erode my retirement savings by a lot.
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March 11th, 2010 at 5:24 am
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Keep working and saving.
The courts have ruled that you are on your own. Companies that offer health care in retirement are not required to do so and may drop the plans at any time.
March 14th, 2010 at 5:07 pm
health care
You are correct. They probably underestimate the cost. A few FACTS:
Medicare premium 1998: $43.80; 2008: $96.40–up 120%. It’s NOT because of a bogus donut hole prescription plan either–largely a gift to big pharma the way it is structured. You’ll also end up with either needing a medigap policy for the 20% co-pay or go on a Medicare HMO where now a LOT of the more expensive things will STILL drop the 20% co-pay in your lap.
You will need, if you don’t have it already, to get long-term care insurance in cas you or your spouse get hit with a dementia, like Alzheimer’s which is NOT covered by Medicare (there is some very limited nursing home coverage. It ends and then we’ll see if Medicaid, which requires you to be basically bankrupt, will kick in or if it will be all dried up as it’s in worse financial condition than Medicare is). BTW, lest you hear the uninformed sing their siren song of UHC–universal health care–it’s NOT covered in those countries either.
In Great Britain, the NHS does not provide much care for Alzheimer’s patients. The caretaking is labeled by the government as a social service, not medical care. Therefore, there is typically a substantial financial burden for the families of Alzheimer’s patients. In August 2004, the Alzheimer’s Society produced a booklet called “When does the NHS pay for care?” It included this statement:
It is important to state up front that this information is not all easy to understand. This is because the system and the process that you have to go through is repetitive, time consuming and far from transparent. The criteria that explain who is entitled to fully funded continuing NHS health care, and who is not, are ambiguous and seem to be applied in an arbitrary fashion in different areas of the country. Reading the information in this booklet should help you to understand the review process and some of the information you should gather. It will not unfortunately tell you whether your case meets the criteria.
…
In Canada, there is a shortage of facilities for Alzheimer’s patients. It is affecting general health care. It is estimated that in Ottawa, for example, that 20 percent of the beds in hospitals are occupied by dementia patients who are simply being held until a bed in a long-term care facility will open up. This has led to surgeries being cancelled and in the emergency departments, patients lined up on stretchers waiting for a bed to become available (Ward, “A ‘journey of losses,’ 25 October 2006, Ottawacitizen.com). Health officials have also called for the province to subsidize the “cost of personal care at retirement homes”—clearly it’s not covered under their plan (see “Welcome to Ontario’s Community Care Access Centres,” ccac-ont.ca). Case managers have 120 clients who are typically reassessed every six months. They allow the patient to select three facilities and when one opens up the patient has a day to decide and two days to move in. If he refuses to take the opening, he must wait six months before reapplying again (Ward).
–Save America, Save the World by Cassandra Nathan (deals sensibly with health care, Social Security, energy, taxation, and more).
IF you’re eligible now, I’d also get an HSA if you can–a high-deductible savings will help you put some bucks away for future expenses.
Get a physical each year and LISTEN to your doctor. Don’t smoke, drug, engage in casual sex, carry 50 extra pounds, etc. and you’ll have fewer health problems. You’ll also catch things early in all likelihood–far cheaper to treat early on.
You’ve got to make sure when you want to retire that you have NO DEBT. You need some money WORKING FOR YOU–could be stock market, real estate, stake in a business–but you need some bucks working for you. (Actually a good financial resource book addressing this and more is Michael J Laurence’s Your Money Rules for Financial Success).
While you’re young or younger, IF you have things like a lifelong funky appendix, you might as well just bite the bullet and let them take it out now. In other words, things that need fixing, get them done NOW. (I mean NEED fixing–no getting an appy just in case.)
And, no matter how old you are, the odds are Medicare will run out or offer a LOT LESS than what people get now. Social Security is on the way out–could be you get $50 a month so they can pretend they still offer a benefit and YES, under the law they CAN do that. (From that Laurence book on finances, here’s your GOVERNMENT statement of that FACT:
There is also a great misunderstanding about Social Security being an “entitlement” that is protected as though it were a contract between the worker and the government. However, the government’s official position is summarized in a famous court case on the Social Security Web site at history/nestor:
There has been a temptation throughout the program’s history for some people to suppose that their FICA payroll taxes entitle them to a benefit in a legal, contractual sense. That is to say, if a person makes FICA contributions over a number of years, Congress cannot, according to this reasoning, change the rules in such a way that deprives a contributor of a promised future benefit. Under this reasoning, benefits under Social Security could probably only be increased, never decreased, if the Act could be amended at all. Congress clearly had no such limitation in mind when crafting the law. Section 1104 of the 1935 Act, entitled ‘RESERVATION OF POWER,’ specifically said: ‘The right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress.’ Even so, some have thought that this reservation was in some way unconstitutional. This was settled by Flemming v. Nestor. pp. 6-7 of Laurence’s Your Money Rules.
You simply have to educate yourself about finances, and it sounds like you’ve done that as you know this FACT that most seem ignorant of, and be prepared for YOUR TAXES to go up to subsidize those who refuse to take personal responsibility for their retirement.
We ARE living the Chinese curse: we live in interesting times.