As we get older, the cost of health care invariably rises. This is creating major challenges for almost every American in one way or another. The primary group affected, of course, is the nation’s aging population.
According to a study from the Kaiser Family Foundation, overall spending on Medicare plans per capita increased in line with the age of participants. In fact, between the ages of 70 and 96, average Medicare spending per capita more than doubled. While the average 70-year-old Medicare plan participant spent $7,566, the average 96-year-old spent $16,145 the study found.
As the American population grows proportionally older and lives longer, the cost of taking care of this increasingly dependent population will continue to rise. This continual increase requires careful planning on the part of not just current retirees, but those planning to enter retirement over the next several years as well. That makes it crucial for financial professionals to prepare for and act on these new demands.
In an interview with Insurance News Net, CEO of HealthView Sciences Ron Mastrogiovanni remarked that advisors who become experts at navigating the health care expense landscape can more effectively serve their retired clients. HealthView Sciences, a creator of health care cost projection software, is well aware of the coming challenges. A recent report from the company projected that as of 2015, health care costs were expected to rise at a rate of 5.1 percent annually. Compared to the current U.S. inflation rate of 0.7 percent, as well as the most recent Social Security cost of living adjustment of 1.7 percent, this could create a staggering deficit.
As Insurance News Net noted, there’s not much hope in trying to escape the rising cost of health care, despite regulatory and research-focused efforts to control it. However, smart retirement planning, especially the use of the right life insurance products, may be the best way to hedge against these outsized expenses.
Life insurance can help
HealthView Sciences report made the point that retirees face rising costs from multiple angles. On one hand, there are predictable costs like routine health care, taxes and living expenses. On the other, there’s the potential for unexpected events, like the sudden death of a loved one or serious property damage, which can seriously derail anyone’s finances without the right planning strategies.
With a well-structured life insurance plan, consumers aren’t just protecting against untimely loss. A life insurance policy with long term care riders can help to ensure protection against rising health care costs associated with a prolonged illness, as well as provide a way to prepare for an unexpected loss. While these plans may be complicated in the eyes of the ordinary consumer, a financial professional with the right knowledge can help guide clients through the mechanics of these plans.
Death and taxes aren’t the only certainties worth insuring against. As the cost of staying healthy and living well continues to climb, it’s vital that consumers have every tool at their disposal to counteract these risks.