How to save money on health care in retirement

Of the various expenses retirees face, healthcare is among the most burdensome.

From Medicare premiums to prescription drug costs, health care expenses can eat up a huge chunk of your retirement savings. The latest projections tell us that the typical 65-year-old man today will spend $189,687 on healthcare expenses in retirement, while the typical 65-year-old woman will spend $214,565. And these figures don't even include long-term care like nursing home expenses.

Thankfully, there are steps you can take to lower your health care costs in retirement. Here are a few ways to save money when you're limited to a fixed income.

1. Take advantage of Medicare's free preventive services

Medicare eligibility kicks in at age 65, and once you're enrolled, you get access to a host of no-cost benefits designed to help you stay on top of your health. But many seniors don't take advantage of these services, and therefore lose out on an opportunity to get ahead of health issues.

As a Medicare enrollee, you're entitled to a free wellness visit with your doctor every year, and scheduling that could help you avoid a separate bill later on. Similarly, many critical health screenings are free under Medicare, including mammograms and certain cancer screenings, diabetes testing, and depression screenings. Capitalizing on these free services is a good way to keep your health in the best possible shape, thus lowering your health care costs on a whole.

2. Address health issues before they escalate

Minor health problems can easily become major ones when they're left to fester. One of the easiest ways to save money on health care in retirement is to address medical issues before they get worse.

Imagine, for example, that you come down with a bad cough but opt to wait it out rather than go to the doctor. If that cough turns into pneumonia and you wind up hospitalized, you'll face a much larger bill than your typical copay under Medicare, all while putting your health at risk.

If you have mobility issues that make it difficult to get to a doctor, utilize Medicare's telehealth system, which gives you access to health care professionals virtually. This way, you avoid the hassle of having to physically get to a doctor's office while benefiting from legitimate medical advice.

3. Consider a Medicare Advantage plan

Part of what makes healthcare so expensive in retirement is the fact that many essential services aren't covered under traditional Medicare. Dental care, vision services, and hearing aids, for example, are just a few of the things Medicare won't pay for. But if you opt for a Medicare Advantage plan, you might save money on these and other critical services.

Medicare Advantage plans are designed to mimic the coverage offered by traditional Medicare, only they typically provide a wider range of benefits. And in some cases, you could end up paying less for Medicare Advantage than traditional Medicare, even with that improved coverage. Medicare Advantage might also save you money by limiting your out-of-pocket spending — most plans put a cap on that figure, whereas with traditional Medicare, your yearly costs are virtually limitless. And that's reason enough to look into an Advantage plan.

4. Shop around for the best prescription drug plan

If you take prescription drugs, it's crucial to find a cost-effective plan in retirement. If you're enrolled in traditional Medicare, you'll need a separate Part D plan to cover your drug costs, but not all plans are created equal. That's why you'll need to do some comparison shopping to see which plans offer the best deals based on the medications you're taking.

But don't just settle on a single Part D plan and stick with it year after year. Because plan formulas can change, it could be that a certain drug that's affordable one year doubles or triples in cost the following year. Furthermore, as your prescription needs change over time, you may come to find that a certain Part D plan saves you more money than another.

Along these lines, it pays to see what your drug coverage looks like under Medicare Advantage. Some Advantage plans include prescriptions, which means you might not only save money, but eliminate the need to deal with a separate drug plan.

5. Buy long-term care insurance

If you think the cost of doctor visits and prescriptions in retirement is astronomical, just wait until you face the prospect of long-term care. And it's likely you will. An estimated 70% of seniors 65 and over wind up needing some type of long-term care in their lifetime, and the figures are downright astonishing.

A year's stay in a nursing home, for example, will run you about $82,000, and that assumes you're bunking with a roommate. An assisted living facility, meanwhile, will set you back over $43,000 per year, on average.

If you want to save money on long-term care costs, invest in insurance when you're in your 50s or 60s. The younger you are when you apply, the more likely you are to not only get approved but snag a health-based discount on your premiums. And while you will pay for coverage year after year, those premiums could save you considerably more than what you would spend on them in the long run.

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Saving money on healthcare in retirement will allow your nest egg to last longer and buy you more freedom to enjoy your golden years. The more you educate yourself on health care costs and plan for them, the better equipped you'll be to lower your expenses and avoid the financial stress so many of today's seniors face.