How Seniors Can Manage Healthcare Costs

Finances are a hot topic right now, especially as many people struggle with inflation. Healthcare costs are especially concerning, as they can come out of nowhere.

Even with Medicare and supplemental insurance, seniors often face considerable out-of-pocket costs, ones that they may struggle to afford on a fixed income. So, what can seniors do to manage these costs and avoid going into debt?

Ways to Reduce or Manage Costs

Review Your Medicare Plan Annually

Medicare works best when you review your plan every year, to ensure that it’s still the best one for your needs. This is crucial because Medicare plans change from one year to the next and your needs may change as well. Reviewing the plan regularly means you’re never caught out.

Also, some changes to Medicare plans can leave you with gaps in coverage. You might miss these if you don’t review the plan regularly and missing them could lead to unexpected out-of-pocket expenses.

Even if your current plan doesn’t change, changes to other plans could mean there’s now a more affordable option for your needs.

If you find this process confusing or overwhelming, try getting someone else involved. Professional Medicare advisors are a powerful choice, as they’re trained in the complexities of Medicare and can help you make the right decisions for your situation. If this isn’t an option, even working with a well-informed friend is better than trying to do it alone.

Use Supplemental Insurance

Medicare isn’t enough to cover all medical needs on its own. Most people will need supplemental insurance as well.

Here too, it’s crucial that you shop around and find the right plan for your situation. Think about the benefits that matter the most to you, the cost, and any restrictions with the plan.

This process can take a while, so it’s important to start early. But, seriously, having the right plan can make a dramatic difference if you run into serious health issues.

Consider Long-Term Care Insurance

Long-term care insurance is an interesting way to pay for future long-term care needs. Alternatively, you may be able to get a long-term care rider on a life insurance policy.

Both approaches mean that you’re paying regular premiums now so that some of your long-term care costs are covered in the future.

As with Medicare, it’s crucial to read the policies carefully. Pay close attention to what is covered and what isn’t. Also check whether there are any exemptions or situations where the insurance might not pay out.

Such insurance won’t be an option for everyone. Sometimes it will simply be too expensive. Other times, current health conditions might mean that you’re not eligible.

Query Bills

Before you pay any healthcare bill, double check that it is what you think and that it’s something you’re meant to be paying. Mistakes are surprisingly common and you don’t want to be paying any more than you need to.

Keep Yourself Healthy

Of course, the best way to decrease healthcare costs is to stay as healthy as you can. This includes eating good food, exercising regularly, and staying social.

Doctor’s checkups are important as well, even if you feel perfectly fine. These checkups help to detect issues early, which often saves you money in the long-term.

Now, these steps don’t guarantee that you’ll stay healthy, but they do give you the best odds.

Save Money Elsewhere

Even with the right insurance, healthcare can be incredibly expensive. You also don’t have that much control over the size of the bill.

The trick is often to find other ways you can save money. This includes the following approaches.

• Review subscriptions. Think carefully about your current subscriptions, including magazines and streaming services. Which do you currently use? Which could you cut down on? Perhaps you could have just one streaming subscription at a time and alternate which service it is for.
• Reduce energy costs. Energy efficient devices, shorter showers, and turning off electronics can all help with your energy costs. You could also shop around to find a cheaper power company.
• Shop smart. Pay attention to sales, focus on generic brands when you can, and use coupons. Buying in bulk can help too, but only if this doesn’t lead to overspending.  
• Cook at home. Cooking at home is almost always cheaper than eating out. You can save even more money by packing lunches for day trips.
• Take advantage of discounts. Discounts are a great way to save money and there are plenty of them out there. Keep a close eye out for senior discounts, as these can be particularly good.

You could also consider downsizing and moving to a smaller home. While this is a more ambitious approach, it’s also a powerful way of decreasing your long-term expenses.

Doing so is particularly relevant if you’ve been living in the same home for decades. If that’s the case, the home is probably larger than you need and likely isn’t well set up for aging. As such, a smaller home may actually be safer and cheaper at the same time.

Start Budgeting and Saving

Most of us know that we should be budgeting and putting money aside. If you aren’t currently doing this, then it’s time to start.

Budgeting is pretty simple, for the most part. You’re basically using a planner, spreadsheet, or something similar to look at your income and expenses. This includes the large and small expenses, as well as estimating amounts for variable expenses (like power bills and buying clothing).

Once you’ve worked through everything, you should have a rough idea of the amount you can spend each week and still hit your long-term goals.

If you’ve never budgeted before, look out for local advisors or classes. There are often free or cheap local options to get people on their feet.

Enrolling in an HSA is also a good place to start, especially if you are still working. If your employer offers an HSA, enrolling early can also help you collect employer contributions. Savings into an HSA are tax-free but they are subject to eligibility rules on qualified medical expenses.

Final Thoughts

While some healthcare costs are unavoidable, choosing the right Medicare plan and supplemental insurance can make a big difference. Finding ways to save money and lower your costs matters too. This way sudden medical needs don’t have a dramatic financial impact.