Health care can be expensive with many factors — like your current health, lifestyle, future potential health care needs, and the economy — that may impact future cost. To add, unplanned doctor visits, surprise bills, other medical needs, and other unexpected cost can put a strain on your finances.
Figuring out how to pay for health care cost as you age can been overwhelming. However, planning ahead for health care cost, including researching to understand the insurance system and the options available to you could be worth the effort.
Explore insurance options
Check to see what insurance benefits are available to you, including Medicare or retiree medical coverage. If you haven’t purchased long-term care (LTC) insurance, remember that neither private medical insurance nor Medicare provides long-term care services.
What’s Medicare?
Medicare is a federal health insurance program created for people aged 65 or older, certain younger people with qualifying disabilities, and people with end-stage renal disease (ESRD). Health care costs differ based upon the plan and what type of benefits your Medicare plan provides. It offers different options for health care coverage: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D (prescription drug coverage). There is also Medigap (Medicare Supplement Insurance).
Retiree medical coverage
A retiree health plan is health insurance offered to retired persons, after their employment ends by their former employer. It's often coupled with Medicare coverage. If you have both — Medicare and retiree coverage generally Medicare pays your bills first and anything not covered or your remaining balance is covered by your retiree plan.
Navigating and understanding the Medicare program can be confusing. You can visit Medicare.gov for more information about Medicare and retiree medical coverage.
Plan for out-of-pocket expenses
Even though Medicare may cover quite a bit, you’ll still need to pay for premiums and some health costs out-of-pocket. Paying for health care and insurance premiums, should be part of your larger financial management discussions. It could be helpful to consult with a Certified Financial Planner (CFP) when figuring out your finances.
If savings aren’t available to pay for health care costs, discussing your needs with family members could be worthwhile, especially if they can and want to assist. If that’s not an option, look into community resources. For example, Administration for Community Living provides links to a range of support services to help you live successfully in your community and Benefits.gov helps you determine if you’re eligible for federal benefits.
Gerontological social workers can also help connect you with financial aid resources and help you fill out paperwork.
Prescription costs
Prescription costs can vary based on the pharmacy you use. There are smartphone apps and websites available to help you search pharmacies for the lowest price on your medication—some even include coupons for your specific medication.
Pharmacy membership clubs can also help you save money. Ask your local pharmacy or search online to compare pharmacy savings club options. However, there's usually a fee for a membership club. You’ll want to make sure the discount on the prescription offsets the monthly or yearly membership fee.