Three Worries With Healthcare at Age 55 and Beyond
Age 55 can be a turning point for financial and healthcare decisions. Just 10 years away from Medicare eligibility, many people focus on saving for retirement. For others, years of careful planning means age 55 is when they begin retirement.
Reaching your 50s can also mean physical health is a bigger priority. In 2014, the average age of disability for Social Security Disability Insurance (SSDI) recipients was 53.7, according to the Social Security Administration. With these types of healthcare and financial transitions at hand, healthcare decisions are incredibly important.
Increasingly, individuals are becoming aware of the complexity of their consumer choices about healthcare. The transitions taking place pre-retirement and through retirement, including Medicare eligibility, are critical phases when it comes to benefits coordination. Unfortunately, the complexity of healthcare decisions continues to grow. But there are resources available to help individuals and their families realize the long-term benefit of good choices and better understanding their options.
Following are three worries that become more prominent at age 55 and beyond:
1. Making It to Medicare
Retiring early or workplace transitions are a couple of reasons people can be concerned about making it to age 65 and Medicare eligibility, but the Affordable Care Act has introduced many more options for finding healthcare coverage before 65. While individuals often have an opportunity to purchase COBRA when they transition away from an employer, it could be critical to savings goals to consider the Health Insurance Marketplace instead. It may be possible to reduce healthcare costs significantly for those who qualify for Marketplace incentives by choosing an exchange plan for themselves and their family.
2. Healthcare Coverage for Family and Dependents
This worry can be most prominent for the family’s breadwinner, especially if he or she is thinking of retiring. Employer group healthcare coverage may provide a plan for the entire family, but this will change with retirement. For example, people close to age 65 with a younger spouse and dependents on their employer health plan may feel as if they have to continue working to sustain healthcare coverage. But this may not be true. Exchange plans also provide alternatives that weren’t available in the past.
3. Working and Social Security
There is no one size fits all approach to handling Social Security benefits. Some continue working into their late 60s while also receiving Social Security benefits. Others delay taking their Social Security benefits to reach a higher level of benefits at age 70. There are numerous articles about Social Security retirement coordination among primary earners, spouses and widowers benefits to realize the most advantage for beneficiaries. But healthcare can also add to this mix. For example, individuals who sign up for Social Security after age 65 and are contributing to a Health Savings Account (HSA) need to be aware of possible tax penalties.
Individuals who can benefit from the Marketplace plans include those who own their own businesses, self-employed professionals, families with large households who may benefit from health care tax credit subsidies, as well as early retirees who have a few years to go to before they are Medicare-eligible at age 65.
About 10 million people use the Marketplace now, but the potential number of people who could benefit is closer to 28 million, according to the Kaiser Family Foundation. There’s a significant opportunity for many people to make good choices that benefit their families and their financial circumstances, especially as they look ahead to their retirement.
This article comes to us courtesy of Tricia Blazier, J.D., personal health and financial planning director for Allsup. Allsup is a nationwide provider of Social Security disability, veterans disability appeal, exchange plan and Medicare services for individuals, employers and insurance carriers.