Introduction to Benefits of Health Insurance for Retirees
It is a common practice among US companies to provide their employees with health insurance. However, it puts a significant burden on these organizations. Thus, most companies no longer provide retirement health insurance benefits.
US citizens, currently employed in the public sector, may enjoy the retirement medical benefits. But one cannot guarantee that the status quo will remain the same after 10 or 20 years. Retirees, formally working in the private sector, must look for suitable alternatives to tackle the situation.
Quick market research highlights that the cost of health insurance policies in America is somewhat higher. If one desires to slash the prices, then he/she must start as early as possible. Opening and maintaining a Health Savings Account (HAS) can come to their rescue.
Provisions enable combining the HAS and the HDHP to lower the overall policy cost. Additionally, the policyholder will be able to obtain various financial perks in the form of tax deductions.
Apart from this, senior citizens also opt for final expense insurance. It assists them in planning their post-death burial expenditures, along with a death benefit for the nominees.
Types of Health Insurance for Retirees in the USA
Whether a person retires at the stipulated age or opts for early retirement, he/she must prepare for future consequences. Here are some health insurance options, which will protect your post-retirement savings.
- Group Retiree Coverage
- Consolidated Omnibus Budget Reconciliation Act or COBRA
- Federal Exchanges
Features of Health Care Insurance for Retirees
Here are some noteworthy salient features of health insurance policies that cater to retirees and senior citizens’ requirements.
- Such insurance policies are offered to people who are 60 years of age or above.
- Many companies do not require an in-depth pre-medical screening before selling the policy.
- The health insurance package comes with a free lock-in span.
- These health care insurance policies offer annual medical checkups.
- Policyholders will receive cover for existing ailments as well.
Without further ado, let’s check out which benefits retires will get by having health insurance.
1. Meet Treatment Costs
Most senior citizens lead a sedentary life. It paves the path for the onset of various lifestyle diseases. Pre-existing conditions like respiratory troubles, cardiovascular issues, and others may take a severe turn.
In such situations, a health insurance policy will come in handy. These medical care packages offer cashless treatment facilities. Thus, the patient can get an admission in a hospital without worrying about the treatment expenses.
Other health insurance policies provide reimbursement coverage. It means that the patient must pay for the treatment. After getting discharged from the hospital, they need to file an insurance claim.
The medical officers will check the documents. If everything is in order, the entire treatment cost will be reimbursed in the policyholder’s bank account.
2. Treatment at Top Facilities
Some hospitals and care centers are better than others. People try to obtain the best medical care for their relatives. The health insurance companies have tie-ups with top-notch treatment institutes.
If the policyholder needs hospitalization, he/she can choose the best from the list of empaneled hospitals. These facilities will make the necessary arrangements to aid the hospitalization process. Thus, quick and proper treatment is guaranteed.
In 2016, an in-depth survey highlighted that 91.2% of all people in the USA purchased health care insurance. It increased to 2.3 million by the end of 2017.
Thus, the positive curve points out that more and more senior citizens are becoming aware of the perks of health insurance packages.
3. Protection from Inadequate Coverage
Some medical insurance policies may offer basic coverage against common ailments. These may not be sufficient in case of serious ailments. The sum assured may not cover the treatment cost.
So, health insurance agents check the requirements of the policyholder. Accordingly, they suggest a plan that can cover all types of treatment expenditures. It will also come in handy when dealing with medical inflation.
4. Better Financial Management
As stated earlier, the treatment cost is on the rise. The scientific and technological advancements play a significant role in this. Experts suggest that senior citizens must not spend their lives’ savings on treatment.
A better and effective alternative is necessary to counter financial emergencies. A significant expenditure can prevent optimum fiscal management. Cashless treatment or medical insurance coverage can prevent financial instability.
5. Tax Benefits for Aged Individuals
When senior citizens purchase health care insurance, they get additional financial benefits. These investments do not fall under any taxation act. Thus, it enhances the chances of obtaining tax benefits.
People must pay a certain percentage as federal tax in America. However, the tax laws state that all health insurance premiums are exempt from this. It not only slashes total tax bills but also reduces after-taxation coverage costs.
6. No Claim Benefits
Health care insurance shields the aged and youngsters against substantial treatment expenses. However, one might not need to get hospitalized every year. It paves the path for attaining NCB or No Claim Benefits.
The No Claim Bonus depends on the policy that the retiree purchases. Some companies reduce the premium amount. Other organizations can increase the coverage amount.
The survey highlights that any retired senior citizen in the USA spends around $4300 annually on meeting medical expenses.
The sum can put a sizable dent on the savings account of the senior citizens in the USA. However, if they purchase a correct and befitting health insurance, they no longer need to worry about this financial burden.
The Bottom Line
Retirees need to remember that the cost of the health insurance policy depends on various aspects. The two important features are age and place.
Thus, intensive research will assist senior citizens in getting the best policy that will safeguard them from excessive expenses.