Health Care Roundup
By now, most of us know to check with our health insurance company to make sure our physician or specialist referral is covered by our health care plan and within the covered network. But what if you’re unconscious or in some other medical emergency? Say, for instance, you need to be airlifted to a medical facility.
One patient, a young doctor in Texas, was billed more than $56,000 for a medevac flight after injuring his arm in an ATV accident. He, the air ambulance company and Blue Cross and Blue Shield of Texas are working toward resolution, with the company asking him to appeal to the Texas Department of Insurance.1
Imagine receiving such a bill in retirement. How might that impact your retirement plan? According to one study by Fidelity, a 65-year-old couple retiring in 2018 could expect to spend $280,000 on health care throughout retirement – not including long-term care costs.2 If you’re concerned that you’re not saving enough, we can help create a plan to help you be better prepared for medical expenses in retirement.
If you are still working, there are options designed to help you save for health care expenses, such as a health savings account (HSA). An HSA is designed to allow you to save pre-tax money to pay for qualifying medical expenses and is open to those covered by a high-deductible health care plan. It can be a powerful tool for retirement health care savings. If an HSA account owner maximizes annual contributions, invests those assets with the opportunity for growth and does not make any withdrawals until he retires, he can create savings specifically designed to pay for retirement medical expenses – tax-free.3 Be aware, however, that the return and principal value of invested HSA assets will fluctuate and, when accessed, may be worth more or less than their original value. Assets placed in investment options are not FDIC-insured, nor are they guaranteed by the bank that administers the health savings account.
Several new laws enacted this year are aimed at helping consumers better manage their health care costs. Until recently, many health insurance plans and pharmacy benefit managers – including those offered through Medicare Advantage and Medicare Part D plans – negotiated “gag clause” agreements with the pharmacies in their network. These agreements prevented pharmacists from letting customers know that a drug they purchased at the store would be less expensive if they purchased it out-of-pocket rather than using their insurance. However, the Patient Right to Know Drug Prices Act and the Know the Lowest Price Act of 2018, both signed into law in October 2018, make this practice unlawful for insurance plans offered by employers, those purchased on the individual market and Medicare Part D plans.4
Content prepared by Kara Stefan Communications.
1 Alison Kodjak. Kaiser Health News. Sept. 26, 2018. “Taken For A Ride: After ATV Crash, Doctor Gets $56,603 Bill For Air Ambulance Trip.” https://khn.org/news/taken-for-a-ride-after-atv-crash-doctor-gets-56603-bill-for-air-ambulance-trip/. Accessed Nov. 8, 2018.
2 Fidelity. April 19, 2018. “A Couple Retiring in 2018 Would Need an Estimated $280,000 to Cover Health Care Costs in Retirement, Fidelity® Analysis Shows.” https://www.fidelity.com/about-fidelity/employer-services/a-couple-retiring-in-2018-would-need-estimated-280000. Accessed Nov. 27, 2018.
3 Ray Martin. CBS News. Sept. 17, 2018. “Many savers missing out on the HSA’s benefits for retirement.” https://www.cbsnews.com/news/hsa-health-savings-accounts-many-benefits-for-retirement-savings/. Accessed Nov. 8, 2018.
4 Susan Morse. Healthcare Finance. Sept. 27, 2018. “House passes bills prohibiting pharmacy gag clauses on drug prices.” https://www.healthcarefinancenews.com/news/house-passes-bills-prohibiting-pharmacy-gag-clauses-drug-prices. Accessed Oct. 31, 2018.
We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
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