Arguably, the costs that often affect retirees the most are the ones associated with health care. With advancements in technology and medical treatments, the price of health care has gone up. Certain groups, such as retirees, feel this more than anyone. This is because their health care costs are typically higher than the average person.
Many retirees turn to the federally funded Medicare program to help them with rising prices. Medicare has helped millions in the past, but as the government lowers its funding at a time when costs are still increasing, the program's future is unclear.
Medicare's Benefits
Many retirees and disabled persons would be lost without Medicare. Even one big medical procedure can lead to a loss of a person's savings in the event that he or she doesn't have health care coverage. While some retirees would be able to afford health care coverage on their own, many find themselves denied due to a pre-existing condition or other such reason.
Luckily for those who can't afford private health care coverage, or are unable to qualify, Medicare is a great option. It doesn't pay all medical costs, but it will cover 80%, which is a respectable amount. Although this can still result in high costs from time to time, Medicare makes those costs much more manageable.
As previously stated, Medicare's future is unclear. Although many are hopeful that the program will continue, there is definite concern that this may not be the case at some point. With so many retirees relying on Medicare, the real question is, what would happen if the program no longer existed?
Skyrocketing Costs
If Medicare was to stop, many retirees would be facing higher health care costs than ever before. Just imagine having to pay 100% of all medical costs, especially on a limited budget. Even if a retiree was able to secure some kind of private health care insurance, he or she would likely be looking at a much higher cost for everything from prescriptions to doctor visits.
Pre-existing Conditions
Another problem that many retirees would face if Medicare wasn't around is the fact that coverage might be difficult to get. Many health care insurance companies have a clause that disqualifies someone if they have a pre-existing condition. This would mean that a lot of people might go without insurance, which could quickly turn into a catastrophic situation.
The Bright Side
If there's any good news to be found here, it's the fact that Medicare isn't going to go away tomorrow. In fact, if you're relatively close to retirement, you have a good chance that it will be around for you throughout your retirement years. The people most likely affected are the ones who are still many years away from retirement. The key for those who fit into this category is to prepare now, before it's too late.
What you'll want to do is begin planning for such an event. Unless the government announces that the Medicare program is going to be around for the next 50 years, assume that it won't be available once you've retired. Make this fact part of your retirement planning. Your goal should always be to ensure that when you retire, you are able to sustain yourself throughout your retirement. To counteract the loss of Medicare, make sure you're maxing out all of your retirement account contributions. This includes your 401k or pension plans, as well as any others. Basically, you want to save as much money as you can, and it's never too early to start.
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