Personal Finance

Health Benefits for retirees

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  • Oct 31st, 2019 9:09 pm
[OP]
Deal Addict
Jul 14, 2006
2373 posts
3241 upvotes

Health Benefits for retirees

I'm looking for information about the types of health coverage that are available for retirees. Similar to the types of benefits provided by most employers these days, what does a plan for dental/drug/vision cost for someone who has retired? FWIW, my employer offers some retiree benefits if one retires at age 55 or later. I don't plan on staying that long.

I'm sure the costs are varied with different providers and options, however even just ballpark figures would be helpful to me at this point.
24 replies
Deal Addict
Aug 1, 2006
1757 posts
1299 upvotes
Toronto
I checked a Mutual Life"FollowMe" policy from Costco that starts from when you retire, with no health check required. Doesn't seem worth it to me, since it's about 150.00 a month per person for health care and dental. Here's one example, for someone aged 55-59 all figures per person:
Enhanced plan with dental: premium 156.10 per month, Rx coverage up 1000.00 per year, Dental coverage up to 700 first year, 850 second year and year 3 plus up to 1000 per year.
Premiere plan: premium 213.40 per month, Rx coverage up to 2400 per year, Dental coverage up to 800 first year, 1000 second year, and 1500/yr year 3 plus
[OP]
Deal Addict
Jul 14, 2006
2373 posts
3241 upvotes
Thanks, that's a good starting point. I figured a monthly cost in the three-figure range would be in play.

Anyone else reading this priced out (or currently paying for) private benefits?
Deal Fanatic
Feb 15, 2006
8857 posts
3352 upvotes
Toronto
You can easily google and do searches for various plans and rates. Just like life insurance choices, these plans and rates depend very much on your age, male/female, where you live, what type of coverage, including dental or not, physio/chiropractor/massage, vision, etc.; how much coverage (how much for dental, silver plan or gold or platinum or even better), deductables, your pre-existing conditions.

Ball park figure is a few hundred dollars a month, depending on what you want.
Deal Fanatic
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Dec 27, 2009
7300 posts
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Victoria, BC
Bull Dog wrote: I checked a Mutual Life"FollowMe" policy from Costco that starts from when you retire, with no health check required. Doesn't seem worth it to me, since it's about 150.00 a month per person for health care and dental. Here's one example, for someone aged 55-59 all figures per person:
Enhanced plan with dental: premium 156.10 per month, Rx coverage up 1000.00 per year, Dental coverage up to 700 first year, 850 second year and year 3 plus up to 1000 per year.
Premiere plan: premium 213.40 per month, Rx coverage up to 2400 per year, Dental coverage up to 800 first year, 1000 second year, and 1500/yr year 3 plus
So, you are basically paying almost as much in premiums as any benefits you could collect (and that is assuming you collected the maximum from the benefits each year).

OP - just self insure. Take that huge amount of cash and save it every month.
Deal Addict
Aug 1, 2006
1757 posts
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Toronto
Chickinvic wrote: So, you are basically paying almost as much in premiums as any benefits you could collect (and that is assuming you collected the maximum from the benefits each year).

OP - just self insure. Take that huge amount of cash and save it every month.
I agree, totally not worth it. At best you'll break even. Normally your medical plan while you are working is much better, with features such as unlimited prescription coverage. If SHTF and you get cancer, oral chemotherapy is not covered under OHIP, and your oral therapy ( if more appropriate than intravenous chemotherapy ) will cost you 20,000 plus dollars per year. Your 1000 dollars back from your own private insurance you purchased after retirement is not going to be adequate. You can probably go on the Trillium drug plan from OHIP if your income is on the lower end, in which case you didn't need the insurance to begin with.
Deal Addict
Mar 10, 2011
2307 posts
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Toronto
As others mentioned probably not worth it to buy any insurance. Most importantly, the Ontario Drug Benefit covers prescriptions for Seniors who only have to pay a nominal amount. Theres also a dental program that covers seniors with low income too.
Deal Addict
Jun 8, 2004
1537 posts
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Oakville
Bull Dog wrote: I checked a Mutual Life"FollowMe" policy from Costco that starts from when you retire, with no health check required. Doesn't seem worth it to me, since it's about 150.00 a month per person for health care and dental. Here's one example, for someone aged 55-59 all figures per person:
Enhanced plan with dental: premium 156.10 per month, Rx coverage up 1000.00 per year, Dental coverage up to 700 first year, 850 second year and year 3 plus up to 1000 per year.
So, you spend 1872/yr to get up to 1700 back in yr one if you max out your health and dental claims? So, best case scenario is you pay 172 more than if you self insured?
Deal Addict
Aug 1, 2006
1757 posts
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Toronto
cba123 wrote: So, you spend 1872/yr to get up to 1700 back in yr one if you max out your health and dental claims? So, best case scenario is you pay 172 more than if you self insured?
Yes, you are right, and even if you do get all your money back you're wasting all that time submitting the claims.
Sr. Member
Oct 17, 2008
586 posts
137 upvotes
Earth
I would suggest maybe check with your company that you retired from for pensioner health benefits - some have pretty good rates!
Deal Addict
Jan 21, 2018
4665 posts
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Vancouver
There's really no way you're going to come out ahead on this.

The insurance company is in business to make money. Their basic principle is to charge you at least 50% more than they expect to pay out. If your claims are significantly higher than they expected, they raise your rates.

This works for company group plans for two reasons: companies get to deduct the full amount they pay for group coverage as a business expense, and company groups generally include a bunch of younger employees who don't use their benefits as much. As a retired individual, the CRA subjects you to a large deductible on health insurance costs, so your payments are generally not a deductible expense to you. And of course you are no longer part of that shared company group where your rate is subsidized by the under-users.

You may be offered the chance to continue your coverage with the same insurance company after retirement, but your rate is likely to double, as well as becoming non-deductible. The main benefit is that pre-existing conditions are covered due to the continuity of coverage.

Your best bet is to try to identify a less expensive plan that covers only unusual expenses and rare risks, not routine stuff.
Deal Addict
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Jan 4, 2009
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Biff88 wrote: As others mentioned probably not worth it to buy any insurance. Most importantly, the Ontario Drug Benefit covers prescriptions for Seniors who only have to pay a nominal amount. Theres also a dental program that covers seniors with low income too.
The ODB doesn't kick in until one is 65+, so there will be gap years with no coverage for someone who retires early (which is what the OP plans to do).
Deal Addict
Nov 13, 2013
2686 posts
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Ottawa
Scote64 wrote: There's really no way you're going to come out ahead on this.

The insurance company is in business to make money. Their basic principle is to charge you at least 50% more than they expect to pay out. If your claims are significantly higher than they expected, they raise your rates.

This works for company group plans for two reasons: companies get to deduct the full amount they pay for group coverage as a business expense, and company groups generally include a bunch of younger employees who don't use their benefits as much. As a retired individual, the CRA subjects you to a large deductible on health insurance costs, so your payments are generally not a deductible expense to you. And of course you are no longer part of that shared company group where your rate is subsidized by the under-users.

You may be offered the chance to continue your coverage with the same insurance company after retirement, but your rate is likely to double, as well as becoming non-deductible. The main benefit is that pre-existing conditions are covered due to the continuity of coverage.

Your best bet is to try to identify a less expensive plan that covers only unusual expenses and rare risks, not routine stuff.
Exactly. And I think people worry about catastrophic stuff most of which is covered by OHIP. If you need a super expensive drug will this opt in plan pay for it? I am doubtful.
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Oct 13, 2007
3650 posts
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Edmonton
13inches wrote: I'm looking for information about the types of health coverage that are available for retirees. Similar to the types of benefits provided by most employers these days, what does a plan for dental/drug/vision cost for someone who has retired? FWIW, my employer offers some retiree benefits if one retires at age 55 or later. I don't plan on staying that long.

I'm sure the costs are varied with different providers and options, however even just ballpark figures would be helpful to me at this point.
Hello, OP. I would disregard the naysayers. I was in the same boat as you and have the coverage. There may be some provincial variations in coverage. Your best bet for rates and coverage is to get a plan shortly after leaving your employer. There is typically a 60 or 90 day provision for this and you do not need to complete any health questions coming off an employer plan. Assuming that you take advantage of the vision, dental and prescriptions, you will come out ahead, particularly since the premiums are tax deductible.

One of the better benefits, often overlooked, is travel. On my plan, there is $5 million coverage and depending on the level of coverage, you can travel 30, 45 or 60 days at a time. Coverage is applicable to age 85. If you will be traveling at all, this would save you a bundle in not having to purchase medical travel insurance. Of course, you have side benefits as well such as massage therapy, etc.

Having the insurance also gives you the luxury of even payments and not being saddled with a big dental bill, for example, in one month.
Deal Fanatic
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Dec 27, 2009
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Victoria, BC
starchoice wrote: Hello, OP. I would disregard the naysayers. I was in the same boat as you and have the coverage. There may be some provincial variations in coverage. Your best bet for rates and coverage is to get a plan shortly after leaving your employer. There is typically a 60 or 90 day provision for this and you do not need to complete any health questions coming off an employer plan. Assuming that you take advantage of the vision, dental and prescriptions, you will come out ahead, particularly since the premiums are tax deductible.

One of the better benefits, often overlooked, is travel. On my plan, there is $5 million coverage and depending on the level of coverage, you can travel 30, 45 or 60 days at a time. Coverage is applicable to age 85. If you will be traveling at all, this would save you a bundle in not having to purchase medical travel insurance. Of course, you have side benefits as well such as massage therapy, etc.

Having the insurance also gives you the luxury of even payments and not being saddled with a big dental bill, for example, in one month.
If you put the same money aside for yourself each month as most of us are suggesting, then you will not feel like you are "saddled" with a big dental bill one month.
Deal Addict
Nov 21, 2014
1552 posts
2036 upvotes
Atlantic
There are other ways of qualifying for the Ontario Drug Benefit program. The most common ones that people know of is:
1. Being 65 and older
2. Being 24 and younger

But there is also the Ontario Trillium Drug Program. It is based on a deductible that takes into account your income and your drug costs. You need to apply for this program.

https://www.ontario.ca/page/get-help-hi ... drug-costs
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Oct 13, 2007
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Chickinvic wrote: If you put the same money aside for yourself each month as most of us are suggesting, then you will not feel like you are "saddled" with a big dental bill one month.
Should I also start a fund to self-insure my $5 million dollar travel insurance?

You’ve taken out of context as that was only one small benefit as an added example.
Deal Addict
Nov 21, 2014
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Atlantic
starchoice wrote:
Should I also start a fund to self-insure my $5 million dollar travel insurance?

You’ve taken out of context as that was only one small benefit as an added example.
The purpose of insurance is to seek protection from catastrophic losses not routine costs.

A $5 million medical bill out of country is considered a catastrophic loss and should be insured.

A dental cleaning is a routine cost. Even if you were to get crowns for a couple thousand, this is not considered a catastrophic loss.

You should never be thinking of "beating" or "gaming" your insurer. Thinking you will get more than you give is untenable - i.e. benefits vs premiums.

Most insurance companies are a business looking to make profit. How could that occur if everyone was "beating" the insurance company by receiving more than they pay?
Last edited by EasyCompany251 on Oct 31st, 2019 4:29 pm, edited 1 time in total.
Deal Addict
Jan 21, 2018
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Vancouver
starchoice wrote: Hello, OP. I would disregard the naysayers... Assuming that you take advantage of the vision, dental and prescriptions, you will come out ahead, particularly since the premiums are tax deductible.
Yeah, those poor gullible insurance companies, it's so easy to take advantage of them. They're such suckers for paying out more than they charge when you would expect them to be experts at making money in their area of business.

I guess that since these insurance premiums are deductible to you, you must have very little income, since the CRA calculates your deductible on medical expenses as a percentage of income.
Deal Addict
Jun 8, 2004
1537 posts
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Oakville
starchoice wrote: Should I also start a fund to self-insure my $5 million dollar travel insurance?

You’ve taken out of context as that was only one small benefit as an added example.
That benefit doesn't justify overpaying. You can get an unlimited (vs 5 million) of multi trip up to 60 days of travel medical for $331/yr, age 49 from RBC. So you can buy this and skip the medical and dental. Dental is never worth. Medical is not worth it most of the times as the caps vs premiums don't justify it.

Travel medical, life insurance, AD&D, and disability insurance are worth it if you need them but you aren't limited to your ex-employers provider for them, unless you are carrying over pre-existing conditions.

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