chapman-health-retirement-llc

Preparing for Health Care Costs in Retirement

Wed, 26 Aug 2026 06:00:18 GMT

What Every Future Retiree Should Know

For many Americans, one of the biggest financial surprises in retirement isn't travel, hobbies, or helping with the grandkids. It's health care.

While Medicare provides valuable coverage beginning at age 65 for most people, it doesn't eliminate medical expenses. Premiums, deductibles, copays, prescription costs, dental care, vision services, hearing aids, and long-term care can all create significant out-of-pocket costs. And for those who retire before age 65, the costs can be even higher.

The good news is that, with thoughtful planning, you can prepare for these expenses and avoid having health care derail your retirement goals.

How Much Should You Expect to Spend?

The Employee Benefit Research Institute (EBRI) estimates that Medicare beneficiaries spend an average of about $4,000 annually in out-of-pocket health care expenses, not including insurance premiums.

Those costs include expenses such as:

Deductibles and copays
Coinsurance
Prescription medications
Dental and vision care
Other routine medical expenses

While recurring costs tend to remain fairly predictable, unexpected health events, such as a heart attack, stroke, cancer diagnosis, or major surgery, often create the largest financial burden.

EBRI found that adults ages 65 through 84 spend roughly $4,000 annually on out-of-pocket medical costs, while households age 85 and older average more than $6,000 each year as health care needs increase.

Retiring Before 65? Plan for Much Higher Health Insurance Costs

If you're planning to retire before becoming eligible for Medicare at age 65, health insurance may become one of your largest retirement expenses.

Without employer-sponsored coverage, many early retirees purchase insurance through the Affordable Care Act (ACA) Marketplace, a spouse's employer plan, COBRA (temporarily), or a private individual policy.

How much should you budget?

A reasonable planning estimate for many early retirees is:

$8,000 to $10,000 annually for an individual
$18,000 to $25,000 annually for a couple

Your actual costs will depend on several factors, including:

Your age
Household income
State of residence
Tobacco use
The level of coverage you choose
Whether you qualify for ACA premium tax credits

Keep in mind that premiums are only part of the equation. You'll also want to budget for deductibles, copays, coinsurance, and prescription costs. Many financial planners recommend setting aside an additional $2,000 to $5,000 per person per year for out-of-pocket medical expenses, depending on your health and chosen plan.

For households retiring several years before Medicare eligibility, these expenses can total well into six figures, making health care one of the most important line items in any retirement income plan.

Don't Overlook Long-Term Care

One of the greatest financial risks in retirement is the potential need for long-term care.

Many people mistakenly believe Medicare pays for nursing home care. In reality, Medicare generally covers only short-term skilled nursing care following a qualifying hospital stay. It does not pay for ongoing custodial care, such as assistance with bathing, dressing, eating, or other daily activities.

Long-term care costs continue to rise nationwide. According to Genworth's Cost of Care Survey, average annual costs commonly exceed:

More than $100,000 for a private nursing home room
Over $60,000 for assisted living
Tens of thousands annually for home health aides and adult day services

Without a plan, even a relatively short stay in a care facility can significantly reduce retirement assets.

Five Ways to Prepare

Fortunately, there are several steps you can take today to prepare for health care expenses in retirement.

1. Build Your Health Savings

If you're still working and enrolled in a qualified high-deductible health plan, a Health Savings Account (HSA) remains one of the most tax-efficient ways to save for future medical expenses.

HSAs offer three valuable tax advantages:

Tax-deductible contributions
Tax-deferred investment growth
Tax-free withdrawals for qualified medical expenses

Unlike Flexible Spending Accounts, unused balances carry over indefinitely, making HSAs an excellent retirement savings tool. Just remember that once you're enrolled in Medicare, you can use the HSA to pay for expenses, but you can no longer contribute to it.

2. Enroll in Medicare at the Right Time

Missing your Medicare enrollment window can result in permanent late enrollment penalties.

Most people become eligible at age 65, with a seven-month Initial Enrollment Period beginning three months before their birthday month and ending three months afterward. If you're still working, your enrollment options may differ depending on your employer's size and coverage.

3. Review Supplemental Coverage

Original Medicare leaves beneficiaries responsible for several out-of-pocket costs.

Many retirees choose Medicare Supplement or Medicare Advantage plans to help manage expenses and, depending on the plan, receive additional benefits such as dental, vision, hearing, or wellness programs. Since benefits and provider networks can change annually, reviewing your coverage every year is a smart habit.

4. Explore Long-Term Care Insurance

Long-term care insurance may help cover services that Medicare generally does not, including:

Nursing home care
Assisted living
Home health care
Adult day care
Certain hospice-related services

Premiums are generally lower and underwriting is easier when coverage is purchased before significant health issues develop.

5. Evaluate Critical Illness Coverage

A major illness can create expenses that go far beyond hospital bills.

Critical illness insurance provides a lump-sum cash benefit after the diagnosis of certain covered conditions, such as heart attack, stroke, cancer, kidney failure, or organ transplant, depending on the policy. The money can be used however it's needed, from paying deductibles and travel expenses to replacing lost income or covering everyday household bills.

Prepare Now, Worry Less Later

Health care is one of the few retirement expenses that almost everyone can expect to increase over time. Whether you're planning to retire at 55, 62, 65, or later, understanding your potential medical costs—and creating a strategy to address them—can help protect your retirement savings and provide greater financial confidence.

The earlier you begin planning for insurance premiums, Medicare decisions, long-term care, and unexpected medical expenses, the more options you'll have when retirement arrives.

If you'd like help evaluating your Medicare options, planning for early retirement health insurance, or exploring supplemental coverage, we're happy to answer your questions and help you understand the choices available.

Hybrid Life Insurance: Plan for Long-Term Care Without Throwing Away Premiums

Wed, 19 Aug 2026 06:00:25 GMT

A Life Insurance Policy That Can Also Help Pay for Long-Term Care

Many people put off buying long-term care insurance because of one nagging worry: what if I pay premiums for years and never need care? With a traditional, stand-alone long-term care policy, that concern is valid. If you never file a claim, those premium dollars are generally gone, a structure often described as “use it or lose it.” Hybrid life insurance, sometimes called linked-benefit life insurance, was designed with that exact worry in mind. These policies combine a life insurance death benefit with long-term care coverage in a single contract, so your family is protected either way, whether you eventually need long-term care or not.

What Is Hybrid or Linked-Benefit Life Insurance

At its core, a hybrid policy is a life insurance policy, usually a form of permanent life insurance, that includes a long-term care benefit built in. If you eventually need help with daily living activities, such as bathing, dressing, or mobility, due to a chronic illness or cognitive decline, you may be able to access a portion of your policy's benefit early to help pay for that care, whether it's provided at home, in an assisted living community, or in a nursing facility. If you never need long-term care, the policy still pays a death benefit to your beneficiaries when you pass away. That dual-purpose design is the main appeal: the money isn't earmarked for one single outcome.

How It Differs From a Standalone Long-Term Care Policy

Traditional long-term care insurance is designed purely to cover care costs. You pay premiums, and if you need qualifying care, the policy pays benefits toward it. But if you go your whole life without needing that kind of care, there's typically no payout and no return of premium. Standalone LTC premiums have also been known to increase over time as insurers adjust pricing. Hybrid policies take a different approach. Because the long-term care benefit is linked to a life insurance policy, an unused LTC benefit doesn't simply disappear. Instead, your beneficiaries generally still receive a death benefit, meaning the value you've paid for isn't lost even if long-term care is never needed.

Two Common Structures

Linked-Benefit Policies

These often set your long-term care benefit pool at two to three times the total premium paid at issuance. Many plans offer optional inflation protection, helping your coverage keep pace with rising costs.

Acceleration Riders

With this design, you attach a long-term care rider to a permanent life insurance policy. If you use the care benefit, it reduces your death benefit dollar-for-dollar.

How Premiums Typically Work

Many policyholders appreciate that hybrid premiums are often structured as level and guaranteed. Depending on how the policy is designed, you might pay a single lump sum up front, spread premiums over a set number of years, or pay over the course of your lifetime. Because pricing and structure vary widely by policy and by insurer, it's worth reviewing exactly how premiums are scheduled, and what happens to your coverage if you were ever unable to continue paying, before you commit.

Tax Considerations to Keep in Mind

Generally speaking, long-term care benefits paid out from a policy that qualifies under Internal Revenue Code Section 7702(b) are treated as excludable from income for federal tax purposes, subject to current IRS per-diem limits that can change from year to year. Death benefits paid to beneficiaries are also typically free of federal income tax in most circumstances. That said, tax treatment can depend on how a policy is structured and your individual situation, so these general statements shouldn't be treated as tax advice. A qualified tax advisor can help you understand how a hybrid policy would apply to your own tax picture.

Who Might Consider This Kind of Policy

Hybrid life insurance tends to appeal to people who want some protection against the cost of long-term care but don't like the idea of premiums that provide no value if care is never needed. It can also be attractive to those who prefer the predictability of level, guaranteed premiums over policies whose costs might rise later. Because these policies often require a larger upfront premium or a structured payment plan, and because underwriting requirements still apply in most cases, they tend to be considered by people who already have some savings set aside and are looking for an efficient way to help protect those assets from the cost of extended care.

Talk to a Licensed Agent About Your Options

Hybrid life insurance with long-term care benefits isn't a one-size-fits-all product. Designs, benefit pools, riders, and pricing can vary significantly from one policy to the next, and what makes sense for one household's health, age, and budget may not make sense for another. A licensed life insurance agent can walk you through the available structures, explain how the death benefit and long-term care benefit interact in a specific policy, and help you decide whether this approach fits your broader financial and family planning goals.

Questions you can ask one of our agents: What is the maximum benefit pool? Is there an inflation protection rider?

This article is for general informational purposes only and is not insurance, legal, financial, or tax advice. Policy features, benefit amounts, premiums, and tax treatment vary by insurer and by individual policy, and no specific savings, coverage, or tax outcome is guaranteed. Review any policy's terms carefully and consult a licensed insurance agent and a qualified tax advisor about how a hybrid life insurance policy might fit your particular situation.

What Medicare Covers (and Doesn't) When You Need a Wheelchair or Scooter

Wed, 12 Aug 2026 06:00:12 GMT

Getting Around Safely Starts With Knowing the Rules

If walking around your own home has become harder, you may be thinking about a wheelchair, power chair, or mobility scooter. Before you call a supplier, it helps to understand how Medicare actually handles these devices. The rules are specific, and a lot of claims get denied simply because a step was missed early on. Here's what to know so you can get the right equipment without a costly surprise.

Mobility Devices Fall Under Durable Medical Equipment

Medicare Part B covers wheelchairs, power wheelchairs, and scooters as durable medical equipment, or DME, when they're medically necessary for use inside your home. Once you meet the Part B deductible, which is $283 in 2026, you typically pay 20% of the Medicare-approved amount (if you have a Medicare supplement plan, your share may be less). Your supplier has to be enrolled in Medicare and willing to accept assignment, or you could end up paying more than expected.

A Face-to-Face Exam Comes Before the Equipment

Medicare doesn't approve a wheelchair (manual or electric) or scooter just because walking is tiring or painful. Your doctor has to examine you in person and document that your condition significantly limits your ability to do one or more mobility-related daily activities in your home, like getting to the bathroom or getting dressed. If you are able to get around your home without a mobility device and only need one for use outside the home, Medicare will not cover it.

The paperwork also has to show that a cane, walker, or manual wheelchair genuinely isn't enough to meet that need safely. Once the doctor has examined you, he or she writes a prescription, called a Standard Written Order, for the mobility device. In the case of a manual wheelchair, the DME supplier does not need to have the Standard Written Order in hand prior to providing the manual wheelchair to you. However, for power mobility devices, the rule is different—the DME supplier must receive the Standard Written Order before providing the power device. And for all types of mobility devices, the DME supplier must have the Standard Written Order before billing Medicare; otherwise, Medicare will deny the claim.

Medicare Picks the Least Costly Option That Works

Here's a detail many people don't expect: Medicare covers the least expensive device that meets your medical needs, not necessarily the one you'd prefer. A scooter uses tiller-style steering and requires decent upper body strength and balance to operate safely. A power wheelchair, controlled by a joystick, is typically approved when a scooter isn't a safe fit. If a scooter would work for you, Medicare generally won't also cover a power wheelchair on top of it.

Some Power Wheelchairs Need Prior Authorization

Certain power wheelchairs and scooters require prior authorization before Medicare will pay its share. Your supplier submits the request and supporting documents to the DME Medicare Administrative Contractor, which usually responds within 10 business days. If the request is denied, your provider can resubmit with more detail.

Renting, Buying, and Choosing a Supplier

For most higher-cost equipment like wheelchairs, Medicare typically pays a supplier to rent the item to you for up to 13 months, after which ownership transfers to you. There are exceptions, such as for customized wheelchairs or scooters and complex rehabilitative power wheelchairs, where you are offered the option to purchase the device upfront.

Always confirm your supplier participates in Medicare and accepts assignment for every month of a rental, not just the first one. If a supplier doesn't accept assignment, you may have to pay the full cost upfront and wait for Medicare to reimburse its portion. Additionally, a DME supplier that doesn't accept assignment can charge any amount they want above the Medicare allowable amount, which you would be responsible for paying. (This rule is different from physicians and other practitioners: those who don't accept assignment can't charge more than 15% above the Medicare allowable amount.) And if you have a Medicare supplement plan, that plan will only pay the coinsurance of the Medicare allowable amount, not the additional charge from the DME supplier.

Don't Forget Repairs, Parts, and Replacement Timelines

Coverage doesn't stop once you have the equipment. If you are within the 13-month rental cap period, all maintenance, repairs, replacement parts, and labor are covered by the DME supplier as part of the rental agreement. If you own a Medicare-covered wheelchair or scooter, Medicare can help pay for repairs and replacement parts when they're reasonable and medically necessary because of normal wear or an accident. In most cases, Medicare doesn't cover routine maintenance, such as cleaning and periodic adjustments or inspections, once you own the device. Keep records of when you received the device and any repairs or replacement of parts, since suppliers and Medicare may ask for that history if you need a repair or eventually qualify for a replacement.

Medicare may cover a total replacement of the device in some circumstances, such as when the device is damaged beyond repair, is at least five years old and is no longer usable, or is lost or stolen, and you have proper documentation.

Medicare Advantage Plans May Handle Things Differently

If you're enrolled in a Medicare Advantage plan instead of Original Medicare, your plan has its own network of DME suppliers and may have its own prior authorization process, even for equipment that wouldn't require it under Original Medicare. Your out-of-pocket costs, annual limits, and covered supplier list can all look different depending on your specific plan. It's worth a call to your plan, or to us, before you commit to a particular supplier.

Talk to Your Doctor Before You Talk to a Supplier

The most common reason mobility device claims get denied isn't a supplier problem. It's incomplete documentation from the very first appointment. If you're struggling with mobility at home, bring it up directly with your doctor and ask what type of device might fit your situation, well before you contact a DME supplier. Ask specifically what your doctor is documenting about your home layout, your daily activities, and why a cane or walker won't safely meet your needs. That conversation, held early, is critical as to whether your claim gets approved.

We Can Help You Sort Through the Costs

Between the Part B deductible, the 20% coinsurance, the additional charge from a supplier who doesn't accept assignment, and whether costs such as repairs, replacement, and maintenance are covered, not to mention the different rules for Original Medicare versus Medicare Advantage, it's easy to feel unsure about what you'll actually owe. Additionally, the Medicare rules around coverage are quite complex; this article is not intended to discuss all aspects of coverage. If you have questions about how your specific plan handles mobility equipment, or whether a Medigap policy could help with your share of the cost, reach out. We're happy to walk through your options with you.

Your ANOC Is Coming: Don't Throw This Medicare Letter Away!

Fri, 07 Aug 2026 06:00:04 GMT

What Your Annual Notice of Change Really Means for You

Every fall, if you're enrolled in a Medicare Advantage plan or a stand-alone Part D prescription drug plan, you'll receive an important piece of mail: the Annual Notice of Change, or ANOC. Many people glance at the envelope, assume it's routine paperwork, and tuck it away in a drawer, but this is a letter worth reviewing.

Your ANOC is your plan's official preview of what will change starting January 1 of the coming year. By law, plans must deliver it to you no later than September 30 each year, which gives you time to review it before Medicare's Annual Enrollment Period begins on October 15. Inside, you'll typically find details about premiums, drug coverage, copayments and coinsurance, provider networks, and any coverage changes starting January 1.

Why This Letter Deserves Your Attention

Many people assume that if you've been happy with your plan all year, then you don’t need to do anything and nothing will change. But Medicare Advantage and Part D plans are permitted to adjust their costs and coverage from one year to the next. The monthly premium might go up or down, a medication you've taken for years may move to a different cost tier or no longer be covered at all, or prior approval may now be required. A doctor or specialist you see regularly may no longer be part of the plan's network.

These changes do not require your permission and can significantly impact your coverage. Reviewing your ANOC carefully gives you a critical head start, allowing you to identify specific concerns or areas to address, such as network or formulary changes, before annual enrollment arrives. This ensures that when it comes time to sit down with us after October 1 for your Medicare review, you and your agent can focus on evaluating the aspects of your plan that you already know need your attention.

What Can Actually Change

The ANOC covers more ground than most people expect. Along with monthly premiums and annual deductibles, it can outline new copayment or coinsurance amounts for doctor visits, specialist care, and hospital stays. It will also show whether your medications have moved to a different cost tier, been removed from the formulary altogether, or gained a new requirement like prior authorization or step therapy. Provider and pharmacy networks can change, too, meaning a doctor or pharmacy you rely on today might not be included next year. Even the maximum amount you'd pay out of pocket in a year, and benefits like dental, vision, or hearing can be adjusted, expanded, or reduced. The plan may even add new, additional supplemental benefits in the coming year.

A Quick Example

Consider a longtime Medicare Advantage enrollee named Margaret, who was satisfied with her plan, didn’t open her ANOC, and let her enrollment automatically renew during annual enrollment. It wasn’t until January that she realized her monthly premium had gone up slightly, and more importantly, a maintenance medication she'd taken for years had moved to a higher cost tier. She also discovered that one of her regular specialists was no longer in the plan's network. Had she caught these changes in October, she would have had time to compare plans and talk with a licensed agent before the Annual Enrollment Period closed. But now she was locked into her plan for the rest of the year.

What to Do When Your ANOC Arrives

The envelope will likely be marked with something like "Important Plan Information” or may be labeled “Annual Notice of Change.” Open it and read through the entire letter. Many ANOCs include a side-by-side comparison of this year's plan details versus next year's. Pay close attention to four things in particular: your premium, your specific medications, the providers you see most often, and the benefits you use most or expect to use in the coming year. If anything has changed in a way that concerns you, that's your cue to explore other options. Starting on October 1, you can work with one of our licensed insurance agents to compare plans and prepare for Annual Enrollment from October 15 - December 7.

Common Mistakes to Avoid

The most common mistake is simply not opening the envelope, and assuming that because nothing has gone wrong this year, nothing will change next year. Another is reading only the first page and missing details buried further in, such as formulary or network changes. Some people miss the window and open it too late to take action during the Annual Enrollment Period, which runs October 15 through December 7. Others focus solely on the premium and overlook drug coverage or network changes, which can end up costing far more over the course of a year.

Free, Unbiased Help Is Available

You don't have to sort through your ANOC alone. Starting on October 1, we can walk you through the changes and help you weigh plans that may better fit your needs in 2027. If you'd like more immediate assistance, your State Health Insurance Assistance Program, known as SHIP, offers free resources to help you understand your notice. Either way, any changes you decide to make during the Annual Enrollment Period will take effect on January 1.

Conclusion

Your ANOC may look like just another piece of mail, but it's one of the most useful documents Medicare sends you all year. Reading it carefully, checking your premium, your medications, and your providers, and comparing your options can help you make sure you’ve got a plan that truly fits your needs. Don't throw it away, and don't let it sit unopened. A little attention each fall can go a long way toward protecting your healthcare and your budget in the year ahead.

Why You Shouldn’t Wait To Start Medicare Plan B

Thu, 24 Jul 2025 14:11:26 GMT

Do I need Medicare Part B? No Waiting!

It is a question that I get all the time. I’m healthy and living offshore – why should I bother with Medicare Part B ? The answer is – it depends on if you ever plan to come back to the US to live. The reality is that paying for Medicare Part B is expensive for folks on a fixed income – a 15% increase to $170.10 per month this year. And if you plan to stay offshore for the rest of your life, then Paying for Part B probably does not make any sense at all.

But if you plan to come home when you hit the slow-go or no-go years – say sometime after 75 or 80 – then it makes sense to examine the financially impact with and without participating the entire time from age 65.

First, Medicare really wants people in Part B beginning at 65, and has a significant penalty:

“If you didn’t get Part B when you’re first eligible, your monthly premium may go up 10% for each 12-month period you could’ve had Part B, but didn’t sign up. In most cases, you’ll have to pay this penalty each time you pay your premiums, for as long as you have Part B.”

– Medicare.gov

This penalty can really add up if you don’t participate for the first 10 years and then come home. I have spoken to many people who regret not participating in the early years of retirement, because the financial impact was so large later on.

Part B Cost-Benefit Analysis

I pulled the data for Part B annual increases for the last 48 years and examined the average annual price increase in Part B over that period. It is hard to imagine, but the monthly premium was $6.70 per month back in 1977, and has averaged 7.5% increase over that period – including a whopping 15% increase this year. The 21 year and 12 year average price increases are 5.7% and 4% respectively. I conservatively used estimated increases of 7% and 4% in my analysis for future projections.

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How Old Are You? Why 65 Really Is the New 60

Wed, 23 Jul 2025 22:23:29 GMT

In pulling together the information for this series of blogs, I was struck by the lack of consistent sub-categories of demographic groups of Seniors based on age. Based on my personal observations I believe in the three phases of retirement: Go-Go, Slow-Go, and No-Go years. But I had no way to objectively define them.

The Search for Senior Age Categories

I have seen definitions used by various Government Departments for what constitute various age brackets for older Americans – but none seems to be consistently used, other than the vague descriptor of “Senior”, shortened from the original “Senior Citizen” for reasons that I still do not understand. Government retirement benefits begin at 20 years of service for the military (as early as age 38) and extend to 67 years-old (for full Social Security), for long suffering Baby Boomers born after 1955. Clearly “Senior” can mean different things when monetary benefits are involved!

Social Security started in 1935, with old age benefits beginning at age 65, when the life expectancy for an American was 60 for men and 64 for women. Seems a little unfair – you could reasonably expect to be dead before you got any money.

Medicare began in 1965 with benefits starting at age 65, with corresponding life expectancies of 67 for men and 74 for women – about 2–9 years of coverage based on gender. By 2020, the respective life expectancies were 75 years and 81 years.

But life expectancy and quality of life are very different questions, and I was still not satisfied with how to reasonably group Seniors in a way that captured relative health and vibrancy. In short – how to define the Go-Go, Slow-Go and No-Go years, and when did they begin and end?

Defining 3 Phases of Retirement

Enter Professor John B. Sloven of Stanford University and his great paper, New Age Thinking: Alternative Ways of Measuring Age, Their Relationship to Labor Force Participation, Government Policies and GDP. Sloven looked at defining age based on either remaining life expectancy (RLE) or 1-year mortality (MR) risk – the actuarially determined risk of dying in the next year. Of the two measures, I chose MR as most appropriate for my analysis – largely because it seemed to give a better feel of vibrancy of the individual in the year in question.

Specifically, Sloven used breakdowns of 1%, 2%, and 4% MR to stratify people demographically as they moved into old age. This is an objective way of measuring the relative age of older Americans and seems much more realistic than using arbitrary chronological age of 65 used in the ’30s or ’60s for Social Security or Medicare respectively. Since Professor Sloven did not assign any categories to these MR classes, I have used:

MR = 1% to 2% : Go-Go Years
MR = 2% to 4% : Slow-Go Years
MR = 4%+ : No-Go Years

With these categories in mind, let’s look at the MR graph (Figure 1) for females, showing the age for attaining each of these categories.

All the data used in this analysis can be found in the Life Tables for the United States Social Security Area 1900–2100. The bottom line (Female 1%) in Figure 1 shows the actuarial determination of the age when American women reached 1% expected MR, growing from around age 50 in 1935 (the year Social Security started) to approximately 65 today. The 1% MR line marks the lower limit of the Go-Go years and is projected to reach 67 in 2040. As shown by the Female 2% line in the chart, in 2020, American women reach the entry into the Slow-Go period around age 71, and the No-Go category (Female 4%) just short of 80.

Corresponding data for males is shown in Figure 2. All the ages for entry into the age categories (Go-Go, Slow-Go, and No-Go) for men are younger than corresponding ages for women. Women generally live longer than men and have a longer life expectancy until age 100.

As an example, in 2020, men entered the Go-Go years at age 61, versus age 64 for women. Men, however, have enjoyed the same or greater absolute and percentage age gain in all the MR categories than women. For example, the age of 1% MR for men has advanced from about 46 in 1935 to 61 in 2020 (15 years or 32.6%). The corresponding ages for women are 50 and 65 respectively (15 years or 30%).

Why 65 Is The New 60

Another way to think about this phenomenon is through the often-used phrase, “65 is the new 60,” or similar age comparisons. The concept is that people remain young longer and can enjoy the relative benefits of youth into later chronological years of life. I have shown this analysis graphically below, displaying the 5-year relative age shift for women. As an example, in 2020, women at the age of 60 had a 0.007 MR, which approximately corresponds to 0.006 in 1980 – in 4 decades, 60-year-old American women were at the same point in MR risk as 55-year-old women in 1980. I have shown the 5-year shifts below and note that the 5-year shifts required between 4–6 decades (1980–1960) for all age groups for women.

The analysis for men is similar. For example, a 60-year-old man in 2020 has an MR of 0.0097, which corresponds to the value of 0.00989 for a 55-year-old man in 1990. This correspondence is shown with green cell values and arrows in the chart above.It is interesting to note that all of the 5-year shifts for men through the age of 75 correspond to values in 1990. Looked at another way, men between 60 and 75 were the same relative age as men 5 years younger in 1990. For men aged over 80, however, these relative gains require 5 decades to accomplish, and men over 85 must go back to 1950 for a direct comparison. Another way to look at it is that men over the age of 85 are relatively old, and always have been.

In Closing

Like all population-based analyses, this framework is an important concept for individuals, but should not be considered predictive at the individual level. Go-Go, Slow-Go, and No-Go are relevant (and humorous) sub-groups, but how an individual may pass through them depends on the person. We all know people who have been struck by early illness or death, and people who defy the aging bands until very old age. But both groups of people are anomalies and do not diminish the value of the framework as a working tool for Medicare planning purposes

Residence Requirements for Medicare

Wed, 23 Jul 2025 22:06:12 GMT

Medicare is a great benefit for retirees and can work wonderfully for people who spend most of their time outside the US – particularly for folks spending most of their time in Mexico and other near-US locations. Medicare has residency requirements – in this article we look at what they are, how they work and how you can meet them and still spend extended time (ET) outside the US (OUS).

I was recently on a trip to Israel and had an interesting discussion over breakfast with a friend – a former finance professor at a well-known business school. He had established residency in Israel, and participated in the local HMO (less than $100 per month for great quality, but not timely care). He had recently returned to the US for a medical procedure for which he was going to have to wait for months in Israel. He and his wife were planning to stay in Israel for 8-10 years, and then return to the US to be closer to family in their later years. He asked me, “Should I drop my Part B and save some money, or should I continue to pay – and if I do, can I get any potential benefit from Medicare today? The research in this piece is how I answered my friend – and I’m happy to share it with you.

Point 1 – Medicare has residency requirements –
3 alternatives for People Spending extended time
outside the US

If you plan to leave the US when you retire and never return (expatriate), Medicare does not matter.
Get health insurance where you are living and relax. You will always have your Part A (hospital) insurance should you decide to move back home, and can enter Part B, but with a monetary penalty of 10% per year for which you were eligible and did not participate. This is not what we recommend, but it works for some people. I talk to many people who planned to leave the US forever, who move back due to loss of a spouse or serious health problems – and the shock of the cost of Part B penalties is always a problem – avoid it if you possibly can.

If you plan to leave the US but want to keep your options open to return for medical care, we strongly suggest you continue to pay your Part B premium and register your address as outside the US with Social Security.
This eliminates the Part D penalties (no Part D late enrollment penalties if you are living outside the US), and it keeps your options open when you return. If you have a critical medical need to return to the US, you have a Special Election Period when you return to enter a Medicare Advantage Plan, beginning in the month following your return. If you are sick and need care at that point, you will be uncovered for Part B (doctors, labs, diagnostic tests etc.) and for Part D (oral drugs) for a period for which you will not have coverage from 1-30 days.
If you maintain residency in the US and continue to pay for Part B, you are eligible for ongoing participation in Medicare Advantage.
This route affords access worldwide to urgent and emergency care through many Advantage Plans. But you have committed to spending most of your time outside the US and may have sold your home and even gotten residency status in Mexico – how does this work?

Point 2 – Residency starts with a mailing address, and time away does not terminate residency

According to Social Security :

“Generally a U.S. mailing address indicates U.S. residency.

(a) Absence from the U.S. (less than 6 months) with no intention of abandoning U.S. residency does not terminate or interrupt an individual’s period of U.S. residency.

(b) Absence from the U.S. (more than 6 months) is not considered temporary unless there is a strong indication the individual is maintaining U.S. residency. Maintaining a house or apartment in the U.S., paying U.S. income taxes as a U.S. resident for the period while abroad, or other similar acts are indications of maintaining U.S. residency.”

The definition of residency is a straightforward concept from Medicare’s point of view. They require a physical address (not a mailbox), but they must respect the lifestyle decisions of beneficiaries. Less than 6 months away – no problem. If you are away for more than 6 months, you should be able to produce convincing evidence of your continued residence.

Social Security suggests that beneficiaries should have two or more of the following which they list as convincing evidence of residency in the US (Source here ) for SSI benefits and in cases where residency may be in question as referenced in Point 1) b. above for ET in excess of 6

months:

Property, income or other tax forms or receipts,
Proof of U.S. home ownership or rental lease or rent payment record,
Utility bills addressed to the claimant,
U.S. driver’s license,
Telephone directory listing,
Regular and frequent participation in social programs such as vocational rehabilitation, Meals on Wheels or evidence showing that the claimant regularly receives services from a social agency,
Proof of employment, such as pay stubs or a contract,
Proof of active participation in a religious, fraternal, or social organization,
A record of volunteer activity that shows regular and frequent performance,
Clinic cards or doctor’s record showing dates of visits for regular medical treatment,
Proof of a local U.S. bank account or check-cashing card at a local establishment; and
Correspondence addressed to the claimant.

It is important that folks spending a lot of time outside their US residence consider the criteria carefully. Bank accounts, mailing addresses, state tax payments, vehicle registrations (including tax payments and insurance on the same), property ownership and annual doctor visits all count for evidence of residency – and you only really need two. Remember, Medicare does not require that you demonstrate home, hearth, and gardens – residency means something else. It is entirely a legal construct and should not be conflated with personal concepts of home.

Be very careful when you pick a residence – be consistent and thoughtful in what you say and do. I was recently working with a client in Mexico who had put in place all of criteria necessary for a residence in the US, and then he told Social Security that he had moved OUS. The instant that you select moving offshore as your residence with Social Security, the US residency requirements change, and you may be required to take extra steps to re-establish residence.

Point 3 – Advantage Plans offer the greatest potential for Extended Time OUS

Many Advantage Plans offer worldwide urgent and emergent care benefits, subject to compliance with their residency requirements.

Advantage plans are where residency really matters. Advantage plans cover limited geographic area – defined by zip code. They are designed for managed care provision within that geographic area and offer limited coverage outside the local home market (Home Market). All Advantage plans can be used anywhere inside the US for emergent care, and for additional cost in certain PPOs and related out-of-network plan options. Advantage plans are only available to residents inside their Home Market, and have networks created to serve residents in that market. Residency venue is critical for normal managed care delivery.

All Advantage plans allow for a minimum of 6 months of continuous travel outside the Home Market. Recently we have seen some plans allow up to 12 months outside the Home Market as a plan feature. These limits come from the concept of moving outside the Home Market. If an Advantage Plan member moves out of their Home Market they must report the move to the Plan, and then can enroll in a new plan in their new Home Market (see point four below for more on this concept).

Point 4 – Medicare treats extended travel like moving – with limits of 6 or 12 months

Because Advantage plans are designed around local care delivery networks, moving out of the home area makes accessing this care very difficult. As an example, if you move out of your Home Market, or travel for over 6 months, then your Plan Sponsor is required to disenroll you – if you tell them or they find out from another source – typically a change reported to Social Security. They are under no obligation to monitor the beneficiaries’ whereabouts, and the beneficiary has no obligation to tell them.

The disenrollment procedure is the same for a move or extended travel – the Plan decides that you have moved, gives you notice, and the beneficiary is then given a special enrollment period (SEP) to enroll in a new plan. There is no concept of retroactive disenrollment – the Plan must give notice and claims must be honored up to the point of disenrollment. There is no prohibition of “moving” back to the original Home Market or selecting a new venue. There are no penalties – after all the beneficiary simply moved according to Medicare’s rules. The system is designed to ensure that beneficiaries are not left without adequate coverage for moving – and travel. You can find the detailed regulations in the Federal Code of Regulations .

Point 5 – Residency is both a requirement and an opportunity – include Medicare when choosing your retirement Residence

Retirees in their Go-Go years have a chance to travel that they may not have enjoyed since college. Choice of residency impacts access to care, taxes, availability of Medicare Supplements and Advantage plans. As I pointed out in Medigap Plans – The 4 Things You Need to Know and 4 Things You Need to Know About Medicare Part C , availability and costs of Medicare Plans varies greatly by location. Access to plans means access to healthcare at reasonable costs – so include Medicare considerations when picking your residence for Medicare.

Medicare conflates moving with travel away from your Home Market – and clearly moving may involve travel away from your Home Market. But they are not the same thing – and Medicare recognizes this fact. Moving will not invalidate claims for services prior to disenrollment, and there is an automatic SEP for dis-enrolled people, to ensure no break in coverage. Medicare Advantage Plans may conflate moving with time out of the Home Market, but the objective of the system is to get the beneficiary enrolled in a plan in their Home Market – not to deny care. All Advantage plans are designed around managed care on a local or regional basis.

We are starting to see plans that offer a nationwide definition of Home Market, which we applaud. The amount of time that a beneficiary spends in their Home Market should be a decision left entirely up to them. Nationwide carriers and electronic networks to support them have obviated the concept of local venue being a requirement for successful managed care and make demonstrating being in the home market much easier.

Finally, Medicare is a great benefit, and coming back to the US every 6 or 12 months makes sense to see your physicians and family. For many folks spending time in Mexico, they come back to the US once or twice every year anyway. If your lifestyle doesn’t include returning to the US, it still makes sense to keep your Part B unless you are certain that you are not coming back to the US.