Vanishing retiree health care benefits
- 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
- 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.