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Healthcare in the Financial Plan

How do you address the role and impact of current and future healthcare needs in your financial plan? With all the attention being given the “affordable care act” and its implementation, together with the seemingly ever increasing number and type of illnesses, diseases and disabilities that may affect one, it sure seems that considering healthcare would be a primary goal of each of us in our planning.

If you are employed, you may have health insurance through your employer and you may pay for some, all or none of that coverage. If you have reached age 65, you probably are eligible for Medicare, which provides partial coverage. If retired from a large employer or public employment, you may well have health care coverage provided to you, at least for those items beyond what Medicare will cover. Or, like many folks, if you are unemployed, self-employed or work for a small employer, you may not have any health insurance beyond what you personally can afford. As a related point, you might have long term care insurance on your own or through an employer. In short, there are many different situations.  

In most cases, whether you are employed or retired, you will be responsible for some portion of your health care costs. That factor should be modeled into and highlighted in your financial plan so you can see its impact on your future choices and know that at least the modeled health costs are covered in your plan. Perhaps you are using a healthcare savings plan in your employment or maybe you have purchased what is called MediGap insurance. Whatever your situation, the anticipated costs should be included in your plan. Once that has been done, don’t forget to understand and plan for your needs and the costs of meeting them to change. For example, the anticipated costs should also factor in what you might expect to be the growth rate or inflation of those costs over time. That is the only way you may be confident that your plan covers the costs and needs and that you will be able to handle them in future.

Using a rational, organized approach allows you to assess the impact of choices of different levels of care and make better decisions.  Do not overlook something so central to your future – get your health and healthcare into your plan.

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