A new app developed by HealthView Services shows Michigan, Florida, Nevada and Maryland as the most expensive states for key components of retirement health care costs. Meanwhile, Hawaii, Vermont and Maine are shown to be the least expensive in the nation.
The app reveals that the total cost of Medicare Part B, Part D and supplemental insurance premiums varies more than 30 percent overall, with Medicare supplemental insurance the main driver of this differential. The app shows that supplemental insurance, which is set at a state level, is 72 percent more expensive for a 65 year old in Maryland than in Hawaii. Medicare Part D premiums, a smaller component of total costs, vary across states by as much as 74 percent. Federally mandated Medicare Part B does not vary across states.
The new HealthView Explorer app was developed for financial advisors and utilizes HealthView Services’ advisor- and physician-reviewed methodology to project retirement health care costs. The app draws upon data from 50 million health care cases to project health care costs by age and state for individuals retiring at 65.
“Medicare Part B, Part D, and supplemental insurance premiums protect retirees from the costs associated with health events. The app shows first year costs associated with this coverage, as well as projections over a 20-year retirement,” says HealthView Services Founder and CEO Ron Mastrogiovanni. “Many retirees face important decisions about where they want to enjoy their retirement years. This tool helps individuals measure the potential impact on health care costs of relocating in retirement.”
The app reveals that a person retiring this year at age 65 in Michigan will spend $3,707 in their first year of retirement, and will have a lifetime projected cost of $152,175 for Medicare Parts B and D and supplemental insurance premiums, assuming a 20-year retirement. This is nearly $40,000 more than a retiree in Hawaii, who will pay lifetime projected costs of $112,528 and a first year cost of $2,818.
For a 55 year old living in Michigan, these costs rise to $6,152 in first year costs, and $252,915 in lifetime costs. If the same person were to retire in Hawaii, their costs would be $4,713 for the first year and $188,575 lifetime, or a difference of $64,340 in projected lifetime costs. By comparison, a 55 year old planning to retire in New York at 65 can expect to pay $5,751 in the first year of retirement on Medicare and supplemental insurance premiums, and $234,683 in lifetime costs to age 85. For the same individual retiring in Florida, these costs are $6,104 and $250,536. The costs for an individual in California are projected to be $5,854 and $239,526.
Designed as a simple and easy-to-use application, Explorer highlights projected retirement health care costs as a starting point for deeper client conversations. For a growing number of retirees these will need to include the topic of Medicare means testing surcharges, which are not built into the app.
“Retirees who will receive more than $85,000 (individual) or $170,000 (couple) in retirement income will be subject to Medicare surcharges. These additional costs may increase Part B and D premiums above these projections by up to 200 percent,” notes Mastrogiovanni. “It is also important to realize that retirees will incur significant out-of-pocket costs not covered by Medicare.”
The impact of these factors are accounted for in HealthView’s more comprehensive health care planning tools, including HealthWealthLink, which can be customized by health condition, gender, current age, planned retirement age, income and state.
“While many of us may be reluctant to move, it is crucial to make informed decisions and understand that retirement health care costs may be reduced by changing your state of residence,” added Mastrogiovanni. “The experience of companies and advisors using our tools and data shows that discussions of health care costs, and what can be done to plan for and manage them, helps relationships and encourages clients to increase savings to cover these costs.”
HealthView Services (http://www.hvsfinancial.com) is the leading provider of retirement health care planning applications, including Medicare, long-term care and Social Security optimization. HealthView believes that a health care cost savings strategy should be a foundational component of retirement planning. The company’s methodology initiates advisor/client conversations that ultimately lead to retirement income optimization.
HealthView Services’ HealthWealthLink is an integrated retirement planning platform that draws upon cost data from more than 50 million annual health care cases to assist financial advisors in preparing personalized estimates of retirement health care costs. The platform provides advisors with the tools necessary to implement various strategies to achieve clients’ retirement goals.
HealthView Services also provides free consumer-facing applications that focus on retirement health care costs, long-term care costs, and retirement savings. The tools and outputting reports supply users with basic information about the client’s retirement outlook, and are designed to spark a conversation between individuals and their advisors about important aspects of retirement planning. The tools are available on HealthView’s website (www.hvsfinancial.com/consumers)