Saturday, August 10, 2013

Preparing for Post-Retirement Medical Expenses

My husband and I have now been retired for over a year and have both turned 49 in the process.  The year went by in a flash.  We moved from one fun-filled adventure to the next, both in town and abroad.  We also took on the onerous and stressful task of helping one set of parents downsize their home and move into a retirement facility.

Unfortunately, we missed celebrating the one-year milestone because our dream retirement has been hit by an unexpected medical setback.  This March, I was diagnosed with Stage 2 breast cancer and required surgery, followed by chemotherapy, radiation and hormone therapy as the prescribed courses of treatment.  The surgery successfully removed all of the tumor and the follow-up treatments are almost complete. 

Luckily we live in a country where most medical expenses including surgery and hospital stays are covered.  What our health care system does not include are costs related to dental care, vision and drugs.  While we were working, these costs were paid for by our company health plans.  When preparing for our retirement, we realized that stopping work at such early ages meant that we would be on our own for these types of expenses until age of 65, when programs such as the Ontario Drug Benefit Program kick in to help out with some of these costs.

As described in our book Retired At 48, we researched various private health insurance offerings, comparing our known health costs against the premiums.
Invariably, the premiums were close to or even exceeded our expenses.  There were also set maximums to the amounts that you could claim against the policy for covered benefits such as drugs, vision, dental, physiotherapy and other services.

This was not the type of insurance we were looking for.  We could afford to pay for our current health costs.  What we were looking for was coverage against future, unexpected and potentially exorbitant expenses from some serious illness.  We settled on Manulife's Catastrophic insurance which has an annual $4500 deductible, after which further drugs claimed in that year are covered at 100% with no maximum.  The premiums were relatively low at about $240 per year as opposed to typical health insurance plans which often cost more than tenfold.

Our foresight and good planning in terms of acquiring health insurance paid off when I fell ill.  Although OHIP took care of the chemotheraphy drugs, it did not cover any of the medicines prescribed to ward off or minimize the many potential side effects of chemo.  This included four injections of Neulasta at around $2800 per shot, used to increase white blood cells and help fight infections.  After we covered the $4500 deductible for the "effective" year, the insurance policy paid for any additional drug costs incurred within this same time period.  So far this has amounted to almost $7000.

This catastrophic insurance has worked out as planned, but we had an unexpected windfall as well.   When it became known that we did not have full drug coverage and were facing such a high financial outlay for our insurance deductible, the hospital social worker helped me apply for the Victory Patient Assistance Program of Ontario.  This organization provides "financial assistance and other value-added services when you've been prescribed an oncology-related drug...".  Victory got in touch with the drug manufacturer of Neulasta and negotiated for them to pay for the entire deductible.  Victory also called Manulife for me and confirmed that Neulasta would indeed be covered by my insurance plan, once the deductible was covered.  So in the end, we ended up being reimbursed for the entire Neulasta fee of over $11,000 as well as the costs of other prescribed drugs.

There are a few considerations to take note regarding Manulife's Catastrophic Insurance offering.  First, you need to be relatively healthy and in good shape to qualify and they will not cover any "pre-existing conditions", or medicines that you were already taking prior to acquiring the insurance.

The deductible applies to every "effective year", which spans 12 months from the day your coverage begins.  My current effective year ran out on August 1 and hopefully, this will be the only year where I will require enough drugs to surpass my $4500 deductible.  So I tried to have as many of my prescriptions for drugs filled before this date as possible.  This included a hormone drug that I need to take for the next few years.  I was not due to start taking these pills until after August 1, but I asked the doctor to write me the prescription in advance so that I could have it filled before my year expired.  I also asked for a larger than usual amount to be filled at once, to maximize the expense covered.

Finally, when I had my claim processed, I found out that the processing fees charged by the drug stores were not covered, although it was not the total $10.99 fee which I saw charged on each prescription.  I received a bit less than I expected on my claim, but most of the expenses that I submitted were reimbursed.

While it is regretful that I had to go through this ailment, our forethought in planning for such a possibility really helped to ease any additional stress from facing significant financial burden on top of the medical concerns.  Being retired, it was also nice that neither my husband nor I had to worry about work-related pressures in addition to everything else.  Having my loving and supportive husband available to be by my side through every doctor's appointment and treatment procedure has been more comfort than I can express.

So all things considered, I have not had it so bad.  I am now coming to the end of my treatments and am recovering nicely.  I've tried to stay as positive and active as possible through it and I now look forward to a full recovery so that I can resume my dream retirement plans.  France, I had to put you on hold, but I hear you beckoning... see you next year!


  1. These are actually wonderful some ideas in the blog. You have touched good quality points here. In whatever way continue writing.

  2. I am glad that the Catastrophic Drug Coverage worked for you. The online Manulife questionnaire was very detailed but the follow up paper questionnaire was even more detailed. It seemed designed to trip and trap healthy people. I assume that the purpose is to collect a fee for coverage and then at a later date refuse a claim based on a confusing question in the original application. Manulife has a reputation for using loopholes to deny Travel Insurance claims.. Too bad, I liked the idea of the product just not that particular issuer.