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Vanishing retiree health care benefits

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  • Save cash to cover health care costs that might arise during the gap between retirement and Medicare eligibility. And that doesn't mean throwing coins in a big jar. It means knuckling down and putting away some real money. Experts say retired couples may need anywhere from a quarter-million to a half-million dollars to cover post-retirement out-of-pocket medical expenses.

  • This one's tough, especially if you've been pricing cruises and breaking-in new golf shoes: Put off retirement. Yeah, it's derailing a dream, but things change. Health and health care costs are part of that change. Sadly, there's no guarantee your company's health insurance won't change, too.

Government workers not immune
If you think you're safe from health care plan changes because you work for the government, think again. Government employees are also getting nasty surprises. Even veterans aren't exempt.

Retired military families recently were dismayed to hear proposed raises to Tricare would double current premiums. While it's not yet a done deal, many say the rate hike has a better chance of pushing through during this off-election year. While it's still low in price compared with"civilian" health care coverage, many fear this is simply the beginning of an upward spiral of costs.

And Coile adds this food for thought: "The central issue is that health care costs are rising rapidly, at a faster rate than either (consumer) prices or income. The difference may be only a few percentage points in any given year, but over time, the differences really add up."

Health care costs in general have risen at an average rate of 5.1 percent per year above inflation for the past 15 years. By law, Medicare premiums must cover 25 percent of total program costs, so as health care costs continue to rise, so will premiums. As an example, says Coile, "Medicare part B premiums have risen rapidly in recent years, from $50 per month in 2001 to $93.50 in 2007."

If you haven't punched your last time card yet, know exactly what's happening with your health care coverage before you retire. You may find that working longer, practicing preventive medicine and saving more will still allow you time to swing that golf club down the road.'s corrections policy -- Updated: Oct. 1, 2007
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