Broker Check

Relocating Health Care

May 11, 2020

Relocating can be exciting and terrifying at the same time. It is fun to think of the new experiences and the fresh start a new home in a new location can promise. There also happens to be a lot of work that goes into uprooting your life and transplanting it somewhere else. A lesson the military taught me well. With everything that goes into moving there are bound to be some aspects that get overlooked. When it comes to health care costs it pays to spend some time getting it right.

According to the Centers for Medicare and Medicaid Services, health care costs accounted for nearly 18% of our Gross Domestic Product. This came out to around $11,000 per person for 2018. We spend a lot of money on health care. These national numbers and averages are not supremely helpful because of how our health care system works, though. When looking for health insurance in the marketplace, through your employer, or for Medicare the first input is usually your zip code. You can, however, use the average health care costs as a benchmark to measure your current costs and expected costs as you evaluate your potential home locations.

Finding the local hospitals or clinics is the easy step of evaluating the health care situation of a new location. The more difficult task is determining the physician’s networks, which insurance plans use which networks, and what your annual cost may be on those plans. This is before evaluating the plans or networks according to what you value in health care. Moving out to the sticks may not be the best option if you value more choice in health care providers. Think about what you want in health care, more than just access, when you evaluate locations.

I have seen many people realize the mistake of treating health care as an afterthought in their relocation. I see two situations on a frequent basis, and it will help to review them so you can understand what to look for if you are in a similar situation. The first is people not realizing the health insurance they have is not available in the new location and the available plans are more expensive, less robust, or both. We have a retirement community not far from here that is not in the best spot for health care. Many of the people moving there are from areas with more health care options and thus more, and cheaper, health insurance options. This is not to say it is a bad place to retire, but the added costs should be factored in when evaluating it as a retirement location.

The second situation is people retiring early that do not realize the full cost of health insurance. Usually this comes in the context of a spouse not being covered by a retiree’s group plan, what a group plan costs in retirement, or what insurance plans can cost in the marketplace until Medicare eligibility. This usually takes some planning to sort out depending on how early you want to retire. Retiring at 55 might sound great but you need to plan out health care costs correctly to know if it is possible. You can squash your retirement plans if you do not realize you will need to pay your spouse’s full health insurance cost until he/she turns 65 and qualifies for Medicare.

The bottom line is that it takes planning to relocate. When you are young and unattached all it takes is a pick-up truck and some gasoline, but the stakes get a bit higher when you have a family or are moving to your forever home. Take the time to do it right or reach out to a professional. If you do the leg work up front you can save loads of health care costs down the road.