Medicare has substantial gaps in its coverage, and if you have Medicare you’ll also need supplemental insurance. There are four types of insurance that can be used to supplement Medicare:
- Employer-provided plans, including career military and union plans
- Medicaid. Each state has its own eligibility rules for Medicaid and other programs for low-income individuals.
Only two or three of these types of insurance are likely available to you. Unless you already know the specific plan that you want to enroll in, it’s best to narrow your selection to three or four plans that appear to meet your criteria. Then you can compare them in detail — their costs, benefits, quality ratings, catastrophic coverage, and network size.
As the estimates above indicate, healthcare costs in retirement are a large financial liability, one that often extends for decades. There’s an 18% probability, for example, that if both spouses are age 65, at least one of them will live another 30 years.
Moreover, almost two-thirds of retirement healthcare costs are typically spent in the last one-half of retirement. So it’s important to choose the best coverage at the start of retirement and then to monitor it each year during open enrollment. The reason is that many plans, particularly those that include prescription drug coverage, change their benefit designs annually.
Managing Medicare’s Costs
-
Next blog posting May 22
15 May 2012
Next blog: What’s wrong with Fidelity’s $240,000 estimate of retirement healthcare costs.
Recent posts
-
Accountable care organizations and how to find one, maybe (2 of 2)
-
Medicare's new accountable care organizations: can they lower costs while improving care? (1 of 2)
-
Medicare and the ways that younger retirees can anticipate its cost curve
Topics
Accountable care organizations and how to find one, maybe (2 of 2)
Medicare's new accountable care organizations: can they lower costs while improving care? (1 of 2)
Medicare and the ways that younger retirees can anticipate its cost curve
