How to Avoid Unexpected Medical Bills
If there’s one thing that can wreck your plans all too easily, it’s having to deal with surprise medical bills. Unexpected medical bills, either due to a sudden illness or injury from an accident, can be truly debilitating. This goes even further for seniors, as retirees on fixed incomes may not have the same resources as younger individuals who still have private insurance coverage through their employer.
We all know that Medicare, while incredibly useful, doesn’t offer full coverage to seniors. The resulting gaps in medical coverage have to be filled in other ways through supplemental insurance unless you want to pay out of pocket – and that’s no way to control medical costs. Even the biggest retirement nest egg can be cracked by an unexpected illness or injury.
That’s why it’s so important to learn how to avoid these unexpected medical bills. Here’s what you should know.
You Need to Prepare for Any Eventuality
Simply trusting that you won’t have any sort of surprise medical issue during your retirement is no way to plan for the future. Is it perfectly possible that you will enjoy a hearty and completely healthy retirement? Of course it is! But none of us can assume that will be the case as we age.
Instead, we need to commit to taking steps to prepare for such an eventuality. This preparation can take many different forms, but all of your decisions are likely to be predicated on finding affordable options to ensure you have adequate health coverage during retirement. Supplemental insurance policies will do well, but only if you have the resources to or interest in paying the premiums on such a policy. That means finding ways to bolster your retirement savings now while you still can.
Building Retirement Savings
There are dozens of ways to build retirement savings. You can leverage investment opportunities to ensure you have residual income that you can rely on in addition to Social Security payments and any pensions you might be due. You can also contribute to retirement savings accounts like IRAs so you have money put aside for you to call upon if necessary. Finally, you can also divest yourself of certain assets, such as property, in order to bolster your savings further.
This last step is perhaps one of the most effective. Selling your existing home, for example, has the potential to provide you with a tidy sum in the form of built-up home equity that you can then use to finance a more affordable and downsized place to live, such as in a retirement community. You can then reinvest the remaining equity to shore up your retirement savings, first to enjoy retirement how you’ve always dreamed, but also to be financially ready in the event of any unexpected medical bills.
A Further Solution: A Continuing Care Retirement Community
Selling your existing home and moving to a retirement community will certainly free up quite a bit of your resources so you can prepare for any eventuality, such as surprise medical bills. Not having to pay upkeep and property taxes on an old home is a major boon, and the proceeds from a home sale grant you access to the equity in your home that you can use to finance your retirement. However, not every retirement community is created equal – while all will help you save money, there’s only one type that is perfect for helping with medical costs.
A continuing care retirement community is one of the best options when it comes to controlling unexpected medical bills. That’s because a CCRC operates on a continuity of care model that meets your healthcare needs as they change. You can move into a CCRC as an independent living resident, but if at any point you would benefit from assisted living or even skilled nursing care, it will be included on the same campus and for the same monthly fee. Let’s get into why this is so beneficial.
How CCRCs Can Help Nearly Eliminate Unexpected Medical Bills
The first benefit of living in a CCRC is that you’ll never have to relocate to another retirement community if your healthcare needs change. If you move to an independent living community that doesn’t offer continuing care options and your health needs change to the point where you require assisted living, your existing retirement community won’t necessarily be able to provide the care you need, or at least at your currently monthly fee. This could lead to you possibly having to relocate, or at least paying significantly higher monthly fees to remain on the same campus. A CCRC with what’s called Type A Life Care, on the other hand, obviates that need, meaning you can stay put and not have to worry about such an event. Same campus, same friends, same staff.
More importantly, though, the costs of any health services are more predictable throughout the entirety of your stay at a CCRC. Upon moving in, you sign an agreement that sets a portion of your entrance fee aside to pay for whatever your future healthcare costs may be, in today’s healthcare dollars, rather than tomorrow’s. When you require healthcare services, your monthly maintenance fee does not rise due to that need. This is the clear winner when it comes to avoiding unexpected medical costs, as you can always count on having access to additional health services like assisted living care without the worry of increasing cost. Standard increases to your monthly fee may still occur based on inflation, of course, unrelated to healthcare.
Avoiding Surprise Medical Bills
Finding ways to save money on your healthcare costs, such as downsizing from your existing home and moving to a continuing care retirement community, are excellent choices. However, don’t forget that you should also take steps to keep yourself healthy as well! Eat healthily, spend time exercising your mind and body, and get regular checkups from your primary care provider, as these will all improve your quality of life and keep you looking and feeling great through your retirement.
If you are interested in a CCRC, you can explore 26 of the best in the country here.
