Four Steps to Reducing Healthcare Costs in Retirement


For most retirees, healthcare costs will be the biggest expense. It’s not a pleasant prospect, but it is a reality.

A 65-year-old couple who left the workforce in 2017 will spend an average of $275,000 to cover medical expenses through retirement, according to the latest retiree healthcare cost estimate provided by Fidelity Benefits Consulting. That’s a 5.8 percent increase from the estimate of $260,000 in 2016.

We can’t just sweep this under the rug and hope it goes away. Instead, let’s take proactive steps to deal with the challenges. This list is not all-inclusive, but here are four ways to help put yourself in the healthcare driver’s seat.

1. “An apple a day.” We all learned that adage when we were kids. Even if we don’t always express our gratitude, we’re appreciative of our physicians. They are happy to see us when we need care, but also find joy when we “own” the preventative measures suggested.

Stay active, remain social, exercise regularly, eat well and do your best to stay healthy and out of the doctor’s office, other than keeping up with regular, preventive care. It will save you money and increase your sense of well-being.

2.The red pill or the blue pill? Late last year, The Washington Post ran a story entitled, “The Other Big Drug Problem: Older People Taking Too Many Pills.”

Researchers estimate that 25 percent of people aged 65-69 take at least five prescription drugs to treat chronic conditions. It jumps to nearly 46 percent for those between 70 and 79.

Did you know that at least 15 percent of seniors seeking care have suffered an adverse drug event (American Family Physician)? About half of these were believed to be preventable. In some cases, “polypharmacy” has been associated with an increased mortality risk.

Let’s be clear: Make no changes before consulting with your healthcare provider. But, in addition to the cost savings, you may reap health benefits by cutting back on all the pills.

3.“Captain’s Log” Supplemental. You know it … we all know it: Medicare doesn’t cover all the incidentals, and won’t cover costs while traveling abroad. While there will always be out-of-pocket expenses, consider a Medicare supplemental plan, sometimes called Medigap. Prices will vary depending on benefits. While there is an outlay of funds to secure the insurance, it can help prevent nasty surprises and can pick up the slack where Medicare Parts A (hospitalization) and B (outpatient and physicians services) end.

Another option is called Medicare Advantage, which allows you to purchase an all-in-one, managed care plan. Medicare Advantage includes Part A and Part B; many costs not covered by Parts A and B; and may also include Part D (prescription drug coverage).

If you’ve enrolled in Medicare Advantage, it’s illegal for anyone to sell you a Medigap policy, according to Medicare, unless you are unenrolling and moving to traditional Medicare. You may want to consult with your doctor, family and friends, as well as your financial advisor.

4.Become a smart shopper. Find the cheapest place to get your prescription drugs and consider generic versions. Some services are now free, including mammograms, prostate screenings and annual physical exams.

Insurance companies negotiate much lower rates with facilities that specialize in specific tests. For example, hospitals and ERs can be much costlier for an MRI than an outpatient MRI center.

Healthcare costs are like taxes: you can’t avoid them. But a smart, informed shopper can reduce the financial burden. That’s money in your pocket, and can lead to a healthier, more enjoyable retirement.


Researched and drafted by Charles Sherry and Horsesmouth.


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