Planning for Retirement? Plan for Health Insurance too

We all know that health insurance isn’t cheap, and that your rates are based in part on your medical history and risk.  That’s why the older you get, the more your health insurance costs.  Very few companies offer health care coverage as part of their retirement plans either.  So as you financially plan for retirement, the cost of health insurance must be considered.

One thing I’ve learned from my mother is that Medicare doesn’t cover everything.  In fact, The Washington Post recently noted that usually Medicare only pays 51% of medical costs, and coverage doesn’t start until you turn 65.  Medicare Part A covers hospitalization; this coverage is what you’ve been paying for during your working career, so there’s no charge for it.  Medicare Part B, which covers non-hospital expenses, runs anywhere from $93.50 to $161.40 a month, based on current income.  Medicare also has deductibles and no cap on out-of-pocket expenses.

My mom chose to purchase Medigap coverage, which helps to cover Medicare’s shortfalls and is available through many health insurance companies.  There are 12 standard policies to choose from, so you only need to compare prices, but even then there’s enough range that you still must shop.  “We still see enough of a difference that it’s worth checking out different insurers through different agents to find the best cost policy,” said Donna O’Rourke, senior health analyst for TheStreet.com.  She sited an example of one plan which was quoted with an $1100 difference between two different companies.

Bottom line – as you plan for retirement, include the cost of a monthly health insurance premium in your budget.  And no matter what age you are, it’s always important to shop for health insurance, comparing the quotes from several different health insurance companies to find the best price.