Posts Tagged "prescriptions"

Tapping Home Equity – Retirees’ Relief Valve

Woman getting a prescriptionOne telling indication that retirees are in serious financial straits is when they take less of their medications or don’t fill prescriptions.

Nearly one in four low-income retirees has difficulty paying for medications, despite passage of Medicare Part D in 2006, which reduced out-of-pocket drug costs. Between 2011 and 2015, the average Medicare beneficiary spent $620 to $700 a year on prescriptions, and people with diabetes, lung disease, and cardiovascular disease spent more than $1,000 a year.

One way retirees can address such hardships would be to tap some of the equity in their homes. Although a homeowner probably wouldn’t use this strategy just to cover drug copayments, new research finds that older Americans who tap equity significantly increase their adherence to their medications – and this finding has broader significance for improving their retirement security.

Most older homeowners are, on the one hand, reluctant to pull cash out of their homes – often their largest asset – through a home equity loan, mortgage refinancing, or reverse mortgage. Yet many of them don’t have enough income to live comfortably and could put this asset to good use to reduce their debt or pay medical bills if they become seriously ill.

To test how home equity might help retirees, the researchers used a series of surveys between 1998 and 2016 that have data on older people’s finances and ask whether, at any time in the past two years, they took “less medication than prescribed … because of the cost?” The analysis controlled for various influences on financial well-being, including education, marital status, and cognitive health, as well as financial resources.

Extracting home equity improved adherence to medications in the short term, particularly for homeowners over 65 who have little wealth outside of their homes. Separately, the researchers showed that retirees who tapped home equity were significantly more likely to take their medications at a critical time – after experiencing a serious illness.

“Housing wealth can play an important role in reducing economic insecurity,” concluded the study, which was funded by the U.S. Social Security Administration. …Learn More

Doctor: Why Medical Costs Keep Going Up

“We are rapidly approaching the point where we will simply be unable to afford medical care,” says Dr. Edward Hoffer. This is no exaggeration, according to the Henry J. Kaiser Family Foundation: health insurance deductibles and copayments are rising so fast that a significant share of working families have great difficulty paying for their care.

“We as a society have to decide whether healthcare is a right or a privilege,” Dr. Hoffer said. “I happen to think it’s a right. We can’t all drive a Mercedes but every American deserves to have access to healthcare.”

His book, “Prescription for Bankruptcy,” provides his insider’s view of why healthcare costs keep going up. For 46 years, he has worked in Massachusetts as a cardiologist, public health official, and hospital and private practice administrator.

Dr. Edward Hoffer

Question: How do U.S. medical costs compare with other countries?

Dr. Hoffer: The U.S. spends roughly twice as much per capita on healthcare as most other countries. Switzerland is nowhere near us, and they’re more expensive than the rest of Europe. Canada, Germany, France – they all have excellent healthcare systems and spend about half per capita what we do.

Q: What does this have to do with patient care?

A family policy costs the employer roughly $20,000 per employee per year, and many employers have been reacting by increasing employees’ deductibles and copays.  If you’re the line worker who’s making $50,000 and you’re faced with a $5,000 deductible, you behave like somebody who doesn’t have insurance. You skip your preventive care or you avoid a medication because all of this comes out of your pocket. Women are deciding not to get a mammography or someone who has a colonoscopy recommended to them looks at the prices and says, ‘Maybe I’ll put it off.’

Q: You criticize high pay for hospital administrators. You once visited a Boston hospital CEO whose office was so large that you “could barely see him at the far end.” But aren’t administrators crucial to the system?Learn More

Drug Discounts, Other Help Available

Consumers are powerless to control spiraling medication prices, but low-income, uninsured and under-insured individuals can often get help paying for their drugs.

The help, in the form of subsidies or prescription price reductions, comes from four sources. The first is exclusively for seniors on Medicare, but the rest are available to everyone.

Federal aid

Medicare’s Extra Help program provides up to $4,900 to subsidize retirees’ drug copayments and Medicare Part D premiums. Individuals are eligible for this assistance if their income is less than $18,210 and the value of their investments, bank accounts and other assets is under $14,390. The limits for couples are $24,690 in income and $28,720 in assets.  Retirees who own their homes do not have to include the property’s value in this limit. Social Security’s website explains what does and does not count as assets.

Social Security takes the applications for this Medicare program. Applications can be submitted either online (SSA form 1020) or in person by making an appointment at a local Social Security office.  Social Security also notifies seniors about whether they qualify.

Price discounts in an app

If your drug is not covered by your health insurance, Consumer Reports suggests trying two cell phone apps (or go online) to search for the lowest-cost prescriptions at various pharmacies in your area. On the apps – GoodRx and BlinkHealth – search your drug name and dose and enter your zip code to find the discounted prices, which can vary dramatically. These companies act as middlemen between consumers and Pharmacy Benefit Managers, which buy generic and brand-name medications in bulk from manufacturers and pass the volume discounts on to consumers. GoodRx provides a coupon that can be saved on a phone or printed out for the pharmacist. BlinkRx requires consumers to pay for the drug on its website and provides a voucher for the pharmacist. These cash prices will not be run through insurance – and won’t count against your deductible – said Lisa Gill, Consumer Reports deputy editor and a specialist in medication pricing.

Walmart also offers discounts on generic drugs, and Costco has very low retail drug prices. Which option is best for you? “It’s going to depend on which medication you take and probably where you live,” Gill said. Not everyone will have success in reducing their costs but, she added, “if the drug’s not covered by insurance, it’s worth trying.” …

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washing away 2018 on beach

Here’s What Our Readers Liked in 2018

We’re kicking off 2019 with our periodic review of the most-read articles over the past year, based on the blog traffic tracked by Google Analytics.

Judging by the comments readers leave at the end of the blog posts, baby boomers are really diving into the nitty-gritty of preparing themselves mentally and financially for retirement. Financial advisers also frequently comment on Squared Away, and we hope some of our web traffic is because they’re sharing our blog with their clients.

Last year, Squared Away received recognition from other media. The Wall Street Journal recommended us to its readers for the blog’s “wonderful mix of topics.” The Los Angeles Times picked up our article, “Why Retirement Inequality is Rising.” MarketWatch published our posts about how pharmacists can help seniors reduce their prescription drug prices and about a Social Security reform to reduce elderly poverty.

The most popular blogs in 2018 fall into five categories:

The Big Picture

How Social Security Gets Fixed Matters

Future ‘Retirees’ Plan to Work

Just Half of Americans Enjoy Bull Market

Personality Influences Path to Retirement

How and When to Retire

Know About the 401(k) Surprise

How Retirees Can Negotiate Drug Prices

Work vs Save Options Quantified

What’s a Geriatric Care Manager Anyway?

Geriatric Help Eases Family Discord

Retirement Pitfalls

Retirees Get a 401(k) Withdrawal Headache

Social Security Mistakes Can Be CostlyLearn More