David Lerner Associates: Women is Health Care in Retirement

At any age, health care is a priority. But when a person retires, focus on health care is more important than ever before. This is especially true for women. Women live longer, develop certain chronic conditions (e.g. osteoporosis) at a higher rate than men, and are more apt to experience medical limitations that directly affect their daily activities. Scary stuff indeed.

That's why it's particularly important for women to factor in the cost of health care, including long-term care, as part of their retirement plan. How much they'll spend on health care during retirement generally depends on a number of variables including when they retire, how long they live, their relative health, and the cost of medical care in the area that they reside in.

Another important factor to consider is the availability of Medicare. Generally, eligibility for Medicare is age 65. But what if retirement at a younger age is the reality? A woman will need some way to pay for health care until Medicare kicks in. While some employers may offer health insurance coverage to its retiring employees, this is the exception rather than the rule. If an employer doesn't extend health benefits, it may be possible to get insurance coverage through a spouse’s plan. But what if that’s not an option? Buying a private health insurance policy (which could be costly) or extending employer-sponsored coverage through COBRA is the route to go.

Medicare

Unfortunately, Medicare won't cover all health-related expenses. This is something to bear in mind as it impacts a person drastically, especially after retirement when there is no earning capacity.

As mentioned, most Americans automatically become entitled to Medicare when they turn 65. In fact, if a person is already receiving Social Security benefits at age 65, they won’t even have to apply–they'll be automatically enrolled in Medicare. However, deciding whether to take only Part A coverage (which is premium-free for most retirees) or to purchase Part B coverage also can be a challenge.

Part A, commonly referred to as the hospital insurance portion of Medicare, can help pay for inpatient hospital care, plus home health care and hospice care. Part B helps cover other medical care such as physician services, laboratory tests, and physical therapy.

If paying fewer out-of-pocket costs is an issue, then consider perhaps enrolling in a managed care plan or private fee-for-service plan under Medicare Part C (Medicare Advantage). Women also may need to think about adequate prescription drug coverage or joining a Medicare prescription drug plan offered in their area by a private company or insurer that has been approved by Medicare.

For some types of care, a deductible is necessary, and there can also be co-payments. That's why many retirees purchase a Medigap policy.

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Some of this material has been provided by Broadridge Investor Communications Solutions, Inc.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances.

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