How Will I Afford Healthcare When I Retire?

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How Employers Can Answer the Burning Question of the Aging Workforce

Retirement is like a long vacation in Las Vegas. The goal is to enjoy it to the fullest, but not so fully that you run out of money. – Jonathan Clements

In 2019, MetLife published a study on insights that are shaping the workplace. As part of this study, they surveyed employees on their top concerns about retirement. Can you guess what the top retirement concern was for employees? Believe it or not, it was not outliving retirement savings. Outliving retirement savings was actually the second highest long-term concern of those surveyed. But the number 1 long-term concern about retirement was whether the person can afford healthcare. 72% of those surveyed cited this as their main retirement worry. Retirement healthcare planning is THE unmet need of today’s aging workforce.

Fidelity recently released an estimate that the average couple retiring in 2019 can expect to pay $285,000 for healthcare over the course of their retirement. In our experience at Doctor’s Choice, we’ve found that the spread on the cost of healthcare in retirement can vary dramatically based on someone’s lifestyle, whether they have chronic conditions and whether they need long term medical care. In the most extreme cases, retirement health costs can reach far beyond this average estimate.

The bottom line is this: there are many unknowns for people when they cross the threshold into retirement. Starting the new chapter of retirement is on one hand exciting, and on the other hand it’s fraught with worry. The employer safety net that was with a person over a 30+ year career, that met both financial and healthcare needs, ends for most people when they leave their employer. Many employers offer retirement planning benefits to remove some of these unknowns for their aging workforce, but healthcare planning is one of the most necessary benefits an employee can receive. 

After starting Doctor’s Choice 6 years ago out of Brown Medical school, I learned that part of the problem with Medicare is that seniors think it’s about knowing when to sign up for Medicare and how to choose the right supplemental coverage. I can safely say that we’ve run into every quirk and glitch in Medicare and through it all I’ve learned that Medicare is actually a planning process. It’s something that people need to start thinking about when they turn 60, not 64 ½ as many think. This prepares the way so they know what they can expect, they have an idea of healthcare costs for their retirement budget, and so they understand how the costs can vary based on income, as this information can help them to decide when they should retire. 

We’ve found that for employers, the best practice is to implement a 3-step process to remove the unknowns of how people will afford healthcare in retirement:

  1. Education – Providing Medicare education to employees, spouses and caregivers gives a high level overview of what they can expect in the years to come. Offering webinars, seminars, or even online courses that people can review confidentially provides a beneficial overview of Medicare, what to expect, what it covers, and how to meet applicable deadlines and avoid penalties.

  2. Personalized Planning – While education provides a nice overview of what to expect of Medicare, the most important guidance and details come when people can understand exactly what they need to know given their personal situation. A person’s anticipated retirement dates, income, health status, HSA contributions and lifestyle have a heavy impact on their personal Medicare plan, when they should enroll, how much they will pay, and how to plan for any gaps in coverage. Medicare is a planning process because of the complexities of the myriad of factors that can influence someone’s enrollment into Medicare. This is the exact reason why we built our proprietary Medicare Roadmap technology. Similar to a “TurboTax for Medicare,” our Roadmap is THE comprehensive resource for guiding Boomers through Medicare from start to finish, with AI-powered custom guidance tailored to each individual’s unique situation.

  3. Advocacy – Once people have completed their own personalized planning Medicare Roadmap, partnering with an advocate to assist them through the process makes the experience smooth and easy. We’ve found that holding someone’s hand before, during and after their transition to Medicare is the best way to ensure avoiding issues. Since enrolling into Medicare involves dealing with Social Security, this process is not without hiccups. Our team guides people through the steps of this process, and once we place coverage we continue to provide concierge advocacy to our members for life.

Using these best practices for retirement healthcare planning answers the burning question of “what’s next?” This guidance prepares people for retirement, but most importantly it prevents the enormous headaches that come from the abundance of misinformation on Medicare. The misinformation is simply a bi-product of Medicare’s complexity and its many rules that vary based on each unique individual’s situation. As outlined in my last post, very well-meaning employers who put together thoughtful off-boarding packages for employees as they retire can unknowingly be incurring Medicare penalties and, at worst, gaps in coverage if they are not fully informed about how Medicare interacts with the individual's personal situation. 

At my company Doctor’s Choice, our goal is to make Medicare transitions a breeze for employers and their members. If you don’t currently offer some form of Medicare education or guidance for your employees, education is a great place to start. And if you’d like to learn more about best-practices for retirement healthcare, feel free to connect with me on LinkedIn.

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About Doctor’s Choice:

Doctor’s Choice is the premier service advocate for Medicare, making healthcare transitions easy for employers and their employees. Founded by a Brown University-trained Physician, they deliver best-in-class service to seniors before, during and after their transition to Medicare. Offering coverage across the country and tech-enabled personalized guidance through their Turbo Medicare Roadmap, Doctor’s Choice provides concierge-level service and healthcare advocacy to our members for life. For more insights on retirement trends and employer strategies for an aging workforce, follow Doctor’s Choice on LinkedIn @DoctorsChoice, Twitter@DoctorsChoiceU, and Facebook @DoctorsChoiceUSA.

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Why Americans Feel They Cannot Save for the Future

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A Medicare Nightmare