Real Life Retirement:  what real people are doing after age 55 

 

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Good Health in Retirement

For good health in your later years, eat good natural food and not too much of it.  Exercise at least three or four times a week.  Have annual check-ups.  And be sure to take your vitamins.  But you know this already, so on to the two key issues of health insurance after retirement.

Early Retirement and Health Insurance.

If your early retirement package includes a good health care plan, you are a very lucky person.  If you choose early retirement and do not have health insurance from your previous employer, you may face health care premiums of $500 to $1000 a month per person!  The new federal Affordable Care Act has changed this situation.  No longer can insurance companies turn you down because of age or health problems.

Early retirees should factor this into their plans.  Some early retirees end up taking part time jobs just for the health insurance benefits.  

Medicare and Health Insurance.

Medicare is a federal government program that pays for part of the medical and health care costs of people age 65 and over.  The monthly fee for Part B (currently $115.40  - but droppind down for 2012) for retirees with an annual income of less than $85,000) is deducted automatically from your Social Security payment.  For most people there is no monthly premium for Part A.  If you start collecting Social Security at 62, you still are not eligible for Medicare until 65.

What Medicare Covers

  • Medicare Part A is for partial payment of hospitalization costs.   

  • Medicare Part B is for partial payment of doctors and out-patient services. 

  • Medicare Part C is for Medicare Advantage plans (HMOs, PPOs)

  • Medicare Part D is for partial payment of prescriptions.  

And there is more fine print and deductibles and coinsurance with all of these than you can shake a stick at!  Because there are many aspects of health care that are not covered by Medicare, or only covered partially, most people choose to add some additional insurance. 

1.  Private Medicare Supplemental Insurance.  This is commonly known as Medigap insurance.   This type of policy usually lets you choose any doctor, any hospital, any specialist without another doctor's referral.  Medicare regulates these policies, which are identified as Plans A, B, C, D, E, F etc.  Each insurer who offers these policies must offer at least one plan.   You pay a monthly fee for this insurance.  The price varies by age and coverage.  To see a list of the government mandated benefits of Medigap policies click here.

2.  Medicare Advantage Insurance Plans.  Basically, these are HMOs or PPOs.  When you "join" one of these plans you are assigned a primary care doctor who decides on treatment, referrals, hospitals, etc.  These plans often offer additional services such as exercise facilities, eyeglasses and prescription coverage.  You pay no monthly fee as a "member", but may have co-pays.   (In reality, you are not a member--you are a patient whose fees are paid by the federal government.)   If you go to a doctor or hospital outside of their service you will probably have to pay 100% of the costs.  

3. Private Fee For Service Plans.  These are new and only available in limited areas of the country.  The Medicare website and your annual Medicare book from the government has more details about them. 

4. Prescription Insurance.  You pay a monthly fee and most of your prescription costs are partially covered up to limits set by Congress.  The medicines available through each company vary enormously, so make sure the prescriptions you take are included in their formulary, their list of covered drugs.  And check again each year because the formularies change annually.  The monthly fee changes annually, too. The 2010 Health Care Reform Act increases the benefits for retirees.

A Real Life Retirement:

Maryl, a retired advertising executive, didn't want to get medical care through an HMO.  She spent a lot of time sorting through stacks of Medigap Supplemental Insurance advertising then searching online until she discovered that there were only 11 Plans defined and regulated by Medicare.  Then it became easy to decide which one was best for her.

Be sure to insist that you receive detailed information in writing about all the Medicare Approved Plans an insurer offers before you sign up.  Don't let a sales advisor or insurance agent make the decision for you over the phone.

5.  Other Medicare and Medicaid Plans.  We suggest that you view your options on the official Medicare website.  There are plans for people with special health conditions and with low fixed incomes.

NOTE:  All names on this site have been changed to protect individual privacy.  The stories are real, the names are not. 



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