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Planning for healthcare costs

Posted April 03, 2013 in Advice Column, Johnston

Clients and their financial advisors have walked for years through life changes and careers. Now it is time for retirement. It is time to start spending money as wisely as it has been saved over the years. A reality of retirement looming for most retirees is healthcare benefits.

Medicare premiums, deductibles and out-of-pocket expenses are costs many consumers and financial professionals are not considering when planning for retirement. Understanding and preparing for healthcare costs in retirement is as important as the annual reviews, yet a small percentage of advisors and/or their clients include healthcare costs in their planning.

Consumers often do not have realistic expectations of what healthcare will cost in retirement. For more than 40 years as healthcare “users,” we have known costs related to healthcare to be the following:
• My portion of the monthly premium my employer does not cover.
• Copays at the doctor’s office.
• Small copays for prescription drugs.

In retirement, if not utilizing a “retirement group plan” from a former employer or union, costs can be different, and in some cases higher. A Medicare Supplement Plan F is a medical plan many of our elderly seniors have and love it because “it covers everything.” Not true. Plan F fills in the “gaps” of Medicare Parts A and B. Did you know that if you went into the hospital and had a Medicare Supplement Plan F, that Part A of Medicare will cover all but $1,184 of the hospital stay? The supplement fills in that gap. In addition, a Part D drug plan with a monthly premium is needed. The consumer is paying a monthly premium — but is that premium cost worth it? On the flipside are the Medicare Advantage plans. No fixed monthly premium for medical and prescription drug coverage, but copays and cost sharing when utilizing the benefits.

What is most important when considering retirement and the role of healthcare doesn’t start with premiums. As an independent agent specializing in the Medicare eligible market, my first concern is where is the client most comfortable, which drives the questions about benefits and finally premiums. Working with an independent agent specializing in healthcare creates no additional cost to you and is a great addition alongside a financial advisor.

If you are approaching 65, are considering leaving a retiree plan from a former employer or just have questions about Medicare because your mailbox is filling up, call me at 515-225-9994, email me at or stop by my office at 5335 Merle Hay Road, Suite 2, Johnston.

I enjoy educating individuals to make informed choices, and I would enjoy meeting you.

Information provided by Janis Van Ahn, Health Insurance Advisor LLC, 5335 Merle Hay Road, Suite 2, Johnston, 515-225-9994.

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