Retirement and Health Care

As I noted almost two years ago, I think healthcare is becoming the biggest issue in retirement (in fact, it could ruin retirement). As a result, I think we'll be seeing more and more ideas/suggestions on how to deal with healthcare as part of retirement planning.

I found this piece from Newsweek that summarizes the problem in their first paragraph:

Retirement planning usually focuses on "the number"—how much money you'll need to support the kind of life you want. For early retirees, there's a second question, potentially even more important: will you have health insurance to carry you to 65 when you finally come under the protection of Medicare? Without it, your health, savings and standard of living are at serious risk.

Ok, so there's the problem -- what's the solution? How do you get from retirement age to 65 (assuming you retire "early") with health care coverage? Some of Newsweek's ideas:

• If your spouse is still working, you can go on his or her plan.
• Look for a [part-time] job with benefits.
• COBRA benefits let you stay in your company plan for 18 months.
• For individual policies, work with a health-insurance agent.

Of course, all this discussion could become a moot point soon. We'll see what the new president/Congress does to address this issue. Should be "interesting" to see what healthcare will look like in 10 years.

Comments

[Traciatim]

While in your working years you could also move to a country that actually cares about it's people . . . or do so in retirement.

[Beyond Paycheck to Paycheck]

Regardless of the strategy attempted by the next administration and Congress, medical care in retirement (I'm talking after you make it to 65 and get on Medicare) will be the most explosive part of future federal budgets.

It makes solving the Social Security challenge look as easy as solving a 2-piece jigsaw puzzle.

[Emily]

I am 24 and I am already worried about this. Why do people keep complaining about tax increases when enormous hikes are needed to keep recieving the social benifit of medicare. Honestly, I would like to believe that the system will be around for me when I turn 65, but it doesn't look good. If the government doesn't have the money to fund medicare for future generations than why don't they start by heavitly regulating the insurance companies and forcing them to accept all pacients. Isn't that the purose of insurance, insure everyone, and the healthy will pay for the sick? The free market will not work for health care, we need the government to get involved.

[WiseMoneyMatters]

@Emily

I don't necessarily agree with the "healthy paying for the sick" mentality. If you look at the increase in obesity rate over the last 20 years, you will see that people are making themselves sick. They aren't eating the recommended 7-13 servings of fruits and vegetables per day. They are getting virtually no exercise aside from thumb exercises on the remote. It's their own fault that health care costs are so high. I don't want to pay for idiots to be idiots. The research shows that a good diet and exercise reduces the risk for virtually every disease known to man. But people won't do it. They love their McDonald's too much.

Look at most Asian countries. Especially look at most 3rd world countries where such luxuries are rare. They don't have near the same rate of cancer, heart disease, and diabetes that we Americans and many Europeans do. They are very healthy even considering the "sub-standard" lifestyle many of them live. That's the key to health care... not putting more money into a failing system.

No thank you.

[savvy]

I plan to have our mortgage paid off prior to retirement. Therefore the money that used to go to the mortgage can go toward healthcare/insurance costs.

[Jim]

WiseMoney said: ".. look at most 3rd world countries where such luxuries are rare. They don't have near the same rate of cancer, heart disease, and diabetes that we Americans and many Europeans do"

Thats largely because people in 3rd world countries don't have the life expectancy that people in developed nations do. Cancer, heart disease and diabetes all occur later in life and unfortunately most people in 3rd world countries simply don't live that long.

Americans could certainly be healthier but things are much, MUCH worse in 3rd world countries.

Jim

[kitty]

@WiseMoneyMatters
Lifestyle is only responsible for some percentage of cost. People who are obese often die younger, so you may actually pay less for them.

Yes, diet and exercise reduce risk of heart disease and type II diabetes, but why they may reduce the risk of some cancers (slightly), they have no effect on many other cancers. Or on auto-immune conditions. Or osteoporosis. Also, the relative risk reduction is in most cases less than 50% which means that out of 10 people who get the disease, the majority will get it even without any lifestyle factors. The only exception is non-smoking that reduces your risk of lung cancer by a 1000%. But lifelong non-smokers, even those who've lived their whole life also among non-smokers can still get lung cancer - like my mother, for example.

Genetics is the biggest risk factor of all, but even someone without any risk factors can get cancer. I have a friend who died at 38 from lymphoma; a friend's husband has soft tissue sarcoma - there are no lifestyle factors that can prevent these diseases. Sure, some of them are rare, but taken together getting one or another "rare" condition is quite common.

Also, in most cases "prevention" of chronic diseases is really more of a "postponement" e.g. instead of getting the disease at 50, one may get it at 70. But everyone still dies, and the majority get sick before the end. If it is not heart disease, then it is cancer; or dementia or osteoporosis. You cannot completely prevent all diseases much as you cannot prevent death.

The biggest risk factor of all is age. There are very few people who are sick at 30, there are many more that have one or more "conditions" at 50, and most have something or other at 70.

Everyone can get sick. Mostly everyone will get some illness as they get old. Group insurance allows to pool risk. I know everyone would love to think how they can become immortal by practicing good lifestyle, but all cause mortality is still 100%.

[Mike]

Another possibility is retiring outside of the US...Mexico, Costa Rica, Thailand...a place with a lower cost of living and good health facilities.