Health costs during your retirement
Things to consider as you retire
Living on a fixed income, you will have to manage monthly expenses along with the needs and wants of your retirement.
Unexpected home repairs, poor investment performance, rising living costs or a serious change in your health could place added stress on your finances. Appreciating how these expenses could change over time will play an important role in planning for a worry-free retirement.
With age comes changing health and increased costs. You may be faced with a chronic condition, which can likely be treated with medications to improve and sustain a good quality of life. Common chronic conditions include cardiovascular disease, cancer, diabetes, arthritis and mental health issues such as dementia. Understanding the financial impact of your health as you age is important in planning for your financial future.
You probably have a good idea of your current health and what you need to do to maintain it. But it is also important to consider how your health will change as you settle into retirement. Getting older is a fact of life and many retirees do not plan for dealing with the cost of chronic health issues as they age.
Health facts for Canadians over 65
Fair PharmaCare is a B.C. government program that helps protect British Columbians from high drug costs. The program subsidizes eligible drugs and other designated medical supplies prescribed by a physician. Coverage is income-based, so families with lower incomes receive more assistance than families with higher incomes.
Under Fair PharmaCare, you pay your prescription costs for BC PharmaCare eligible drugs until you meet your deductible. This deductible is based on family income from income taxes filed two years prior to the current year. It is important to recognize that drugs that are not eligible for PharmaCare coverage do not count towards your deductible; therefore, you are responsible for the full cost of the medication.
While you were employed, the extended health insurance provided by your employer covered your deductible. Without that coverage, you are responsible for your deductible amount. As this amount varies, we recommend you use the Fair PharmaCare Calculator5 to help you estimate your costs. After you meet your deductible, PharmaCare helps you with eligible costs for the remainder of the current year.
TO LEARN MORE ABOUT MSP AND FAIR PHARMACARE INCLUDING THE FAIR PHARMACARE CALCULATOR, VISIT GOV.BC.CA/HEALTH.
5 For more information on your deductible, please contact Health Insurance BC at 1-800-663-7100
What is eligible for Fair PharmaCare?
All British Columbians can register for Fair Pharmacare. Although Fair PharmaCare can help, about one third of drugs covered by BC PharmaCare require application to the government for coverage by Special Authority. To receive Special Authority approval, your doctor must complete a form to verify that you need to take the drug. For more information on Special Authority, please visit gov.bc.ca
Filling the gap
A health benefits provider such as Pacific Blue Cross offers private insurance for non-core services that are not covered by Fair PharmaCare and the Medical Services Plan. Private health insurance fills the gap where our healthcare system falls short. An individual plan can help cover your Fair PharmaCare deductible, drugs not eligible under BC PharmaCare, dental services and more. Purchasing a private health and dental insurance plan can help protect your retirement savings.
IN BC, ALL RESIDENTS ARE ENTITLED TO COVERAGE BY PHARMACARE. UNFORTUNATELY, EVEN AFTER THE ANNUAL DEDUCTIBLE HAS BEEN MET, NOT ALL MEDICATIONS ARE COVERED. APPROXIMATELY HALF THE DRUGS ON THE CANADIAN MARKET ARE NOT COVERED BY BC PHARMACARE. THEREFORE, NONE OF THOSE COSTS WILL EVER BE PICKED UP BY BC PHARMACARE EVEN AFTER A PERSON HAS MET HIS/HER DEDUCTIBLE.
Case report: Margaret
Margaret is a recently retired 68 year old female who was diagnosed with type 2 diabetes 10 years ago. She has managed to control her condition with only one medication–metformin–which helps lower her blood glucose. Since her recent retirement she has not been as active and has been dining out more. As a result, she has gained weight and is feeling more fatigued.
During a routine checkup, her doctor noticed that her diabetes had progressed and added a second medication which did not cause weight gain like some of the other glucose lowering medications. Her cholesterol was also elevated and she presented with high blood pressure. As a result, he prescribed two additional medications for these cardiovascular conditions to lower her risk for heart attack and stroke.
In Margaret’s case, the progression of her disease after retirement required additional medications at an increased cost.
Initial medication regimen: (before retirement)
|Metformin 500mg twice a day||$3|
New medication regimen: (during retirement)
|Diabetes||Monthly Cost||Annual Cost||PharmaCare Coverage6|
|Metformin 500mg twice a day||$3||$36||Yes|
|Atorvastatin 10mg daily||$10||$120||Yes|
|Ezetimibe 10mg daily||$50||$600||No|
Post retirement with NO private drug plan:
Margaret’s retirement pension income = $30,000
Margaret’s annual PharmaCare deductible = $900
BC PharmaCare pays when Margaret reaches deductible of $900
Margaret’s annual out of pocket expenses for prescription drugs:
|BC PharmaCare eligible drugs||Metformin ($36) +
|$156 which is still under her deductible of $900|
|Drugs NOT eligible for BC PharmaCare coverage||Liraglutide ($2,400) +
|Total out of pocket expenses paid by Margaret||$3,156|
6 The amount of this drug will contribute towards one’s PharmaCare deductible.
* Drug prices exclude dispensing fee.