The cost of health care is a real retirement planning wild card. That makes being able to depend on Medicare coverage a blessing, even if it's not the total answer.
Bankers Life, which is a provider of Medicare supplement and Advantage programs, surveyed Americans between the ages of 47 and 75 who had household incomes between $25,000 and $75,000. The insurer found that 45 percent of working boomers ages 47 to 64 report they are waiting to retire until they are eligible for Medicare. This compares to only 20 percent of retirees age 65 to 75 who factored Medicare into their decision of when to retire.
Chris Campbell, vice president of strategic marketing and business development at Bankers Life, said the study provided two insights the company found surprising. While many people call Medicare an entitlement program and some people think it is free, 65 percent of recipients are paying the same or more for Medicare than they paid for insurance before their retirement.
The other thing that surprised the insurers was how little people who are still at the retirement planning stages know about Medicare -- 26 percent of those younger than 65 said they knew nothing. "People don't understand the mechanics of the program until they are on it and need it," Campbell says.
But after people start receiving Medicare, they like it. About 81 percent are either somewhat, very or extremely satisfied with their Medicare benefits. Ninety-two percent said they didn't have to switch doctors when they started receiving Medicare.
Campbell offered four suggestions for anyone approaching Medicare age or already a recipient:
- Stay healthy -- 98 percent of the people surveyed said health is important to a happy retirement.
- Make an effort to understand the program -- you'll get better services and you'll pay less if you know how Medicare works.
- Get health care when you need it. Not going to the doctor when you need to might save you a few bucks immediately, but if avoidance results in your getting sicker, that can cost you more. Plus, Medicare provides a lot of free preventative care.
- Use an independent insurance agent to help you find the best Medicare supplement or Medicare Advantage plan for you. These are knowledgeable people who won't charge you anything and will walk you through the process.
Will Medicare be there in its current form when younger people need it? Some 87 percent of middle-income Americans are rightly concerned about the future of Medicare with 71 percent believing the federal government will cut back Medicare benefits. Obviously, Medicare is a federal program that works. Tell your Congressional delegation you expect them to support it.