“We’re too young to have this stuff happening.” That was my first reaction when a doctor client of mine emailed from a local hospital’s critical care unit to share a frightening experience. John nearly died from a pulmonary embolism brought on by air travel that caused a clot in his leg that had migrated to his lungs. When he had a CT scan done to make the diagnosis, the radiologist saw a tiny calcification in one of John’s coronary arteries. During the follow-up scan for the clot, John asked the doctor to use a cardiac CT protocol instead of the lung protocol. That scan showed a lesion in the coronary artery known as the “widow maker.” So John had stents put in place to defuse what he called a “ticking time bomb.” His only symptom was indigestion.
John’s words have haunted me these last few months. He wrote, “We are at an age where it is easy to brush off symptoms that can lead to an early and avoidable demise. I had a normal stress test and am in otherwise good shape. I am lucky but also knew enough to push for the right diagnostics.” And he concluded his email with this advice: “An often ignored component of retirement planning is assembling and maintenance of a top notch group of medical specialists.” That’s terrific advice. Why not meet with your primary doctor and get the ball rolling?
50-somethings should also consider these strategies to get a head start on managing healthcare costs in retirement:
- Adopt a health-conscious lifestyle. Taking care of yourself by practicing preventive care often results in lower future healthcare costs and greater independence in retirement. Investing in your health helps you to cultivate your most important resource, your own “personal capital.” The good news is that annual checkups are covered in full under the Affordable Care Act. As your children grow up and get more independent, it can be a good time to focus more on yourself.
- Think about a Health Savings Account (HSA). You might consider funding an HSA if your employer offers one. Created as part of the Medicare Prescription Drug and Modernization Act of 2003, HSAs are unique tax-advantaged savings vehicles that integrate healthcare spending and retirement saving. HSAs are only available with High-Deductible Health Plans (HDHPs) to help you save money to cover the higher deductibles. More employers are beginning to offer the HDHP/HSA option because the lower premiums help them — and you — keep a lid on healthcare costs. If you’ve finished paying college tuition and your children are off your health plan or you’ve paid off your mortgage, the higher deductibles but lower premiums associated with the HDHP/HSA may be a good choice.How much can you contribute to an HSA? For 2016, the maximum individual contribution is $3,350 and families can save up to $6,750. If you are age 55 or older, you can take advantage of a catch-up contribution of $1,000. That money then has the potential to grow tax-deferred, and any amounts you take out to cover health care expenses are tax-free. And, unlike a flexible spending account, your HSA money can be carried over year to year.
- Begin to research Medicare. Medicare won’t cover all of your medical expenses. Deductibles and co-pays, as well as dental care, hearing aids, cosmetic surgery, acupuncture and, perhaps most significantly, long-term care are among services not covered. Pre-retirees tend to focus on premiums and co-payments when estimating healthcare costs. However, even without serious illnesses, coinsurance payments and uncovered expenses can be a real drain on your retirement budget. The cost of prescription drugs is often a major expense, so it’s important to do your homework on Medicare’s various drug plans. Visit www.medicare.gov for more information. It’s complicated, so an early start is smart.
- Mitigate retirement risks. Seven in ten people will require long-term care (LTC) in their later years to help with the activities of daily living, such as walking, eating, toileting or bathing. LTC insurance can be a solution to your desire not to be a burden on your children. It’s also crucial to maintain sufficient disability insurance. Another risk to manage is a layoff. There’s no early-bird special with Medicare, so if you lose your job before age 65 you’ll need to purchase health insurance. COBRA insurance could help you bridge the gap, but the cost could be greater than what you pay for insurance as an employee. You also can check the national insurance marketplace at www.healthcare.gov for options. Also, make an assessment of your sources of income should you become disabled and need to retire prematurely. It may not be too late to obtain or increase long-term disability income insurance if you need it.
- Stay up-to-date with healthcare changes. Taking a long-term view of your healthcare more will be complicated by the fact that our nation’s healthcare system continues to be in flux. The Kaiser Foundation is a non-profit, non-partisan leader in health policy analysis that I rely on to stay current. Visit them at www.kff.org; you’ll find everything from timely news articles to discussions on healthcare policy and industry trends.