Medical costs across the board have increased over the years but especially for seniors. In 2016, it was estimated average health spending costs per year for those over 65 years was $11,316!
Budgeting and figuring out ways to lower health care costs can be helpful to mitigate this potential burden. As healthcare costs for seniors can be a large expense, these important budgeting tips and ways to cut costs can help.
Health Care Costs for Seniors
Health care costs can be the largest expense for the retirement budget according to US News. These are currently some of the top health care costs for seniors.
Prescription Drugs
Maybe not surprising, Market Watch suggests prescription drugs are the fastest growing expense for retirement years. Prescription drug costs are rapidly increasing beyond the increase of payment from social security cost of living.
Market Watch suggests in 2021 more than 500 drugs increased in cost of 4.2 percent on average compared to an increase in social security cost of living payment of only 1.3 percent.
Health Insurance
Even with the best health insurance, senior citizens can often have expensive co-pays or other payments for health insurance. These co-payments and/or monthly bill payments for insurance costs can be a consistent factor for high healthcare costs for seniors.
Health Costs Not Covered By Insurance
Unfortunately not all medical procedures, tests, treatments or medical appointments may be covered by insurance. In some instances, these unforeseen medical costs that are not covered by a health plan can be drastic.
Budgeting Tips for Senior Citizens
While not possible to guarantee avoidance of excess medical expenses, there are steps to take now to prepare as best as possible for any future needs.
First, start by setting aside a fund specifically for any unexpected medical expenses. This can be as simple as starting a savings account that a certain amount of money goes into every month only for medical expenses. For further options, it is best to talk to a financial advisor.
A long-term care insurance policy can also help cover future health costs. Chances are healthcare options will either have limited to no coverage for any long-term care needs. Long-term care needs could include staying or rehabbing in a facility or it could mean paying for home health aides to come into the home. Having this insurance can help cover any healthcare needs that may come up if any long-term care is needed.
Understand the differences between Medicare and Medicaid can be of benefit, too. Medicare is a federally-funded insurance program while Medicaid is an assistance program. Medicare coverage is also broken down into plans, including medicare advantage plans.
Lastly, continue to review prescriptions with a healthcare team to assess if they can be modified to a more affordable or different type of medication. For example, switching to a generic drug instead of a brand name can help save money now. Generic drugs are usually cheaper than brand names but work the same way.
Ways to Lower Healthcare Costs for Seniors
Besides budgeting, there are other ways now seniors can help lower healthcare costs. The following are ways to preserve and possibly prevent unnecessary negative medical costs.
Break Self Isolation
Social isolation in senior citizens can lead to cognitive and physical decline which could lead to negative medical events. Therefore, breaking self isolation can be a key way to help keep health costs low throughout senior years.
In the current times, breaking self-isolation can seem challenging. Be vigilant to maintain connections with family, friends, and others even if cannot meet face to face.
Lower Falling Risk
According to the Centers for Disease Control and Prevention (CDC), millions of senior citizens fall every year with one out of five falls causing serious injury. Lowering the risk of falling for senior citizens is a key way to lower healthcare costs for now and in the future. Taking steps to make living spaces safer, like bright lights and rug-free, is an easy way to potentially save unwanted medical emergencies.
End of Life Care Wishes
End of life care wishes are an important step for lowering health care costs. Researchers found among those surveyed 71 percent of Americans say they would prefer to die at home, but 73 percent of people aged 65 or older die in a hospital which can be costly.
More than 25 percent of Medicare spending is incurred in a patient’s last year of life. Stanford researchers found having end of life care wishes in place could save thousands of dollars in the last months of care.
Lifestyle Prevention
Implement lifestyle prevention now that can lower risk for chronic diseases throughout senior years and keep up physical strength. Prevention at every age is important for maintaining health. Prevention can include eating a nutrient-rich diet, exercising, stimulating the mind, and staying socially connected.
Know What Your Plan Covers
Know what your healthcare covers and what it does not. Take time to go over your plan; ask a family member or someone trusted to also go over it.
There may be services to take advantage of for free. Other ways to lower health care costs include switching things in policy or possibly other aspects of care.
Summary
There is no doubt healthcare costs are rising for seniors. However, there are ways to lower healthcare for seniors and budgeting tips that may help.
Setting aside funds for unforeseen medical events, getting long-term care insurance, and assessing medications with the medical team are budgeting tips to help cut some healthcare costs now or in the future.
Other ways to lower costs are maintaining a healthy lifestyle with diet, exercising, and putting in place end of care wishes. Breaking isolation can lower the risk of physical/mental decline, and lowering fall risk can help avoid a potentially major medical crisis.
References:
9 Ways to Reduce Health Care Costs in Retirement. U.S. News & World Report. https://money.usnews.com/money/retirement/medicare/articles/2018-03-21/9-ways-to-reduce-health-care-costs-in-retirement.
Brandus P. Opinion: How seniors are already falling behind in 2021. MarketWatch. Published January 9, 2021. https://www.marketwatch.com/story/how-seniors-are-already-falling-behind-in-202-2021-01-05.
Bucceri Androus A. Healthcare Costs & Spend: Rising by Age, Gender, and Race. Healthcare Costs & Spend: Rising by Age, Gender, and Race || RegisteredNursing.org. Published December 25, 2020. https://www.registerednursing.org/articles/healthcare-costs-by-age/.
Three approaches could lower health care spending while improving late-life care. News Center. Published July 16, 2020. https://med.stanford.edu/news/all-news/2020/07/strategies-to-better-care-for-older-adults-at-lower-cost.html.
