Health Care Costs – The Entire Picture

health-care-costSo many people approach 65 and think, “Whew! Now I will be on Medicare and my health care costs will go down.”

Well, while not entirely wrong, they are not right either.

In a recent article by Boston Business Wire, the experts at Fidelity Benefits said you need $245,000 set aside at retirement to pay for Medicare and associated illness expenses (the expenses Medicare doesn’t pay) as you age, per person.

That doesn’t include the costs of long term care. Medicare will not pay for long term care expenses. So if a person needs care beyond hospital/rehab/doctor visits, then they must pay for this out of pocket or buy an insurance product.

In this same article, the experts at Fidelity Benefits said that a 65 year-old couple would need to set aside an additional $130,000 to pay for the costs on long term care and that is if they bought a long term care policy that paid out over $300,000 per person for care as well! So if you don’t buy insurance, you need to set aside

  • $245,000 for Medicare and health expenses, and
  • an additional $430,000 for long term care expenses.

I may not be an actuarial wizard, but I can add that up and equals a whole lot of cash! So whatever you are doing about medical expenses – what planning or measures you are taking – you need to look at the whole picture. Medicare may pay for many things – but it doesn’t pay for all things. It doesn’t even pay the most expensive thing that most people face a they age: the costs of long term care.

If you are going to shop for a long term care insurance product – be sure you use an experienced broker-agent. Ask them if they have been selling this product for 3 years or more and ask them how many a year they sell. You want someone who does this particular type of planning every week, not 2 or 3 times a year!

This is not a small financial decision (whether you buy or don’t buy an insurance product) – so it is worth it to find a seasoned professional specialist to help you wade thru the options and get the right fit for you.

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