Saving for health care
As costs continue to rise, here’s how to keep pace
By Heather Drago, Ohio Public Employees Retirement System
May 15, 2018 — How much will a couple retiring in 2018 need for health care costs? That’s what this recent Fidelity Investments report discusses. According to Fidelity, $280,000 is what a 65-year old couple retiring this year is projected to pay in health care and medical expenses throughout retirement.
By making smart choices now, you may be able to experience healthier outcomes later in life. Some suggestions:
- Understand how your coverage works. Review your health care coverage and take advantage of preventive services, which may be covered at 100 percent. Preventive services may include a routine physical, PAP or mammography, colonoscopy, osteoporosis screening, flu and pneumonia vaccinations.
- Prepare for potential health care costs. Set up your own personal bank account to save for and track health care expenses. It may also help to understand shared expenses, such as the annual deductible and out-of-pocket limit, copay and office visit charges as well as emergency service costs.
- Use available wellness resources such as smoking cessation, diabetes prevention and weight management programs to help prevent or manage medical conditions.
- Talk with your doctor. It is OK to ask your doctor why tests and medications are needed and to research care options together. Questions to ask:
- Do I really need the recommended test or procedure? What are the risks if I decline or delay treatment?
- Is there a less-expensive treatment, procedure or medication alternative? Your health plan may have a tool to help you research the cost of recommended services.
- What are the side effects and risks of the medication, procedure or test? Is there a simpler, safer option available such as a change in diet or exercise plan?
For additional resources, visit the Wellness Programs and Resources section of the OPERS website.
8 thoughts on “Saving for health care”
Where were you when I was working??? Better late than ever, I guess.
Is this to prepare retirees for the expected elimination of health care benefits by OPERS. With whats been going on it would make sense.
I know Ms. Drago can not answer but the path is now clear to us.
At least post my comment and not censor it.
Since OPERS did not get the cost-of living change they recommended through the first stage of the
legislative process, I am wondering if that will impact our continuing to get the health care benefit
we currently have as retirees. I have been retired since 2003 and greatly appreciate the excellent
health care support we get. What work is being done now on the cost-of-living proposal?
What exactly is included in that $280,000 figure? Is this only out of pocket costs? Or is it total expenditures including insurance covered portion?
Good question, Tim. The footnote at the bottom of the article provides more detail, including what is included in the $280,000 total.
Has any thought been given to allowing more flexibility by OPERS for the medical allowance?
I for one would prefer OPERS not directly manage our health plan and possibly provide a set monthly allotment towards a non-Medicare medical plan of our own choice from some form of medical savings account. It would seem OPERS would save substantial dollars by not directly administering our health care (OPERS runs a self funded plan?) and retirees like myself could pick a better suited and more affordable health plan (such as a Health Share plan) I know it may not be to everyones liking, but we should have more options available.
Recent experience on health care costs: currently filling prescriptions with Express Scripts assuming on-line 90 day supply was cheapest. With recent mix up found out that local Preferred CVS could fill the Express Scripts 90 day supply ($39) for $18, same 90 day supply.
The lesson: check all your Preferred Pharmacies every year when you change Rx coverage or prices change each year.
People must think about and plan for health care costs a long time before their retirement. A few years before retirement, my government employer adopted a high deductible health plan with a Health Savings Account. The employer and I both contributed to HSA. I was fortunate to retire with a fairly healthy balance in my HSA. That, along with the OPERS Health Reimbursement Arrangement have allowed me to fund good medical care and good insurance coverage for over five years and I still have some funds in my HSA. Had the HSA been available ten years earlier, I could have funded my retirement health needs for many more years.