Have you ever wondered how your healthcare costs may affect your retirement corpus? Or if healthcare assessment is a crucial part of your retirement plan? Speaking at the Outlook Money’s 40After40 Retirement Expo, Aashish Sethi, president and head of Health SBU & Travel, Bajaj Allianz General Insurance, highlighted the alarming trends in medical inflation, chronic diseases, and the increasing life expectancy in India, which collectively pose significant challenges for retirees. 

While giving a session on ‘Healthcare Costs in Retirement: Are You Prepared?’, Sethi said that with the right kind of planning, healthcare does not need to be a morbid subject. He emphasises it becomes a morbid subject when people don’t plan for it, which later converts into issues of both financial and mental health. 

Highlighting the rising premiums, Sethi said if you look at the key trends in India and see health insurance premiums over the last five years post-pandemic, you will see them double. Moreover, studies estimate that retirees in India may need around Rs 5 to Rs 10 lakh annually to cover healthcare expenses.

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Climate Change and Disease Patterns: Sethi says climate change is expected to increase the frequency of respiratory and vector-borne diseases, further straining healthcare systems and adding to retirees’ healthcare burdens. 

As individuals approach retirement, managing rising healthcare costs becomes crucial. Here are several strategies they can employ: 

Understand Medicare Options: Familiarise yourself with Medicare, including its different parts (A, B, C, and D) and coverage options. Consider enrolling in a Medicare Advantage plan or a Medigap policy to help cover additional costs. 

Health Savings Accounts (HSAs): If eligible, contribute to an HSA. These accounts allow you to save money tax-free for medical expenses, which can be particularly beneficial in retirement. 

Budget for Healthcare Costs: Create a detailed budget that includes projected healthcare expenses. Consider factors such as premiums, out-of-pocket costs, and long-term care needs. 

Stay Healthy: Invest in preventive care and maintain a healthy lifestyle. Regular check-ups, exercise, and a balanced diet can help reduce the risk of chronic diseases, ultimately lowering healthcare costs. 

Shop for Insurance Plans: Compare different health insurance plans during open enrollment. Look for plans that offer the best value for your specific healthcare needs. 

Consider Long-Term Care Insurance: Evaluate the need for long-term care insurance to cover potential costs associated with assisted living or nursing home care. 

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Utilise Preventive Services: Take advantage of preventive services covered by Medicare and other insurance plans, such as screenings and vaccinations, to catch health issues early. 

Negotiate Medical Bills: If faced with high medical bills, don’t hesitate to negotiate with healthcare providers or inquire about payment plans.

Stay Informed About Policy Changes: Keep abreast of changes in healthcare policies and regulations that may affect coverage and costs.

Consult a Financial Advisor: Seek advice from a financial planner specialising in retirement planning to help strategise for healthcare costs. 

Sethi emphasises that individuals can better manage their healthcare expenses as they transition into retirement by employing these strategies.