Five ways to tune up your Medicare coverage

Health care is one of the largest expenses you’ll face in retirement, and making good Medicare coverage decisions is a great way to save money.

Medicare doesn’t cover all expenses in retirement, but it’s the most important factor in smoothing out health care costs, which play such an important role in retiree budgets. Medicare data shows that average per-person health care spending by retirees is three times higher than for working people ($18,424 in 2010, compared with $6,125). Health care inflation has been flat in recent years, but there are signs that it is escalating and many experts expect it to return to historical norms of 5 percent or more per year.

Financial planners should be up to speed on the ins and outs of Medicare insurance options to help clients make optimal coverage choices. Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Fla., and a physician with a background in family medicine, takes it a step further, reviewing all her clients’ insurance coverage annually.

“Everything—not just health insurance,” she says. “But on health care, we want to check to see if there have been any changes in the person’s health condition that would call for adjustments in coverage.” The firm schedules the insurance check-ups throughout the year in order to avoid a glut during the annual Medicare enrollment period.

My my latest column, I review five ways planners can  help clients tune up their Medicare coverage. Although the column is written for planners, I hope that retirees will also find useful suggestions here, too.

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