Helping you become ‘RETIRED READY’
How you can afford MEDICAL INSURANCE in retirement
Shortly after I sent my last Newsletter, I was contacted by a 60-year-old client who advised me he was in the process of ‘working out’ his resignation with his current employer.
He advised me that when he changed jobs he would no longer be able to afford to maintain his medical premium of $555 per month which had, until his resignation became effective, been paid for by his employer. He asked me for some options.
He had no pre-existing health conditions so I suggested he apply for and purchase a fully underwritten ‘top of the line’ plan through Partners Life as the premium would be $130 less at $429 per month and the cover would be substantially better but was individually ‘medically underwritten’.
Statistics show that most issues over age 60 were likely to be coronary artery / heart attack, cancer or stroke or backs, hip or knee replacements. I recommended he consider a $5,000 voluntary excess.
Having a voluntary excess means you pay the first $1,000, $2,000, or $5,000 of each claim and the premium reduces by up to 50%. However, with a Partners Life Private Health policy, if you are hospitalised with a stroke, heart surgery or cancer, Partners Life waives the excess. This means you don’t have to pay it.
My client still could not fit the medical policy into his new budget on the lower salary with the new job that he was transferring too.
As he had accepted the concept of the excess I then suggested he remove the stand alone ‘specialists and tests’ extension to the policy, as again, if he was prepared to ‘reserve‘ an account for $5,000 for the surgery excess, this is the same account that could be used to pay for specialists and tests costs like an ultrasound, colonoscopy, cystoscopy, scans, x-rays etc. The other benefit of the Partners Life private health plan any test is reimbursed to you if surgery occurs within 12 months from the test.
This was a further reduction of $115.74 per month off the premium. Reducing the base cost to $311.26 per month.
The new Partners Life premium with a surgery and hospitalisation cover for $600,000 non-surgical services for $500,000 and non-pharmac Medsafe approved drugs and therapies with an excess of:
$1,000 the monthly premium at age 60 would be $270.86
$2,000 the monthly premium at age 60 would be $206.56
$5,000 the monthly premium at age 60 would be $142.26
This started me thinking about ways to help clients who are ‘slowing down’ or wishing to reduce their hours of work and the risks they must now take, to protect a happy and financially sound lifestyle as retirement closes in. The premium simply comes down to an affordability / lifestyle choice.
In everyone’s retirement planning the public health system and medical issues are ‘flagged ‘as an identified life risk issue. Public vs private medical protection simply comes down to a budget line item, cost vs risk management priority.
It’s important to note that the scenario above is a case study and everyone’s situation is different. No decision should be made on this newsletter alone.
There are of course other providers that we work with and some clients will already have NIB medical policies.
NIB helps members manage their health with preventative care programmes.
Designed to support those who have or are at risk of chronic health conditions, NIB’s programmes help reduce or even avoid the need for further treatments by providing the tools to support you.
Support programmes on offer include:
Womens’ wellness
Diabetes care
Cardiac care
Cancer care
Joint pain management
Bowel screening
Contact Kevin or Sharon for more information or for a referral to a programme.
Please give Kevin or Sharon a call or email us while you are healthy, to discuss your Retired Ready medical options and how and when this rearrangement / transition would be appropriate for you. Feel free to share this information with friends and colleagues and remember if you are looking for a speaker on retirement planning give me a call, I am happy to share my knowledge with the community.
Warm regards
Kevin Seque