Seven Least Expensive States Based on Retirement Healthcare Costs
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Retirement is an exciting milestone, but it takes a lot of planning to achieve the lifestyle people want. One way to ensure your clients get the retirement they’ve always dreamed of is to plan where they’ll live during retirement. Some states are more expensive based on housing, goods and services, and other factors. To safeguard their retirement, these should be assessed if your client is considering or is open to the idea of moving. Since healthcare costs are the number one fear in retirement for Americans, this article will focus on which states are the least expensive to retire in based on healthcare costs.
Here are the seven states, leading up to the #1 least expensive.
#7: Texas
Monthly average Medicare Advantage plans premium: $51.50
Monthly average premium of Medicare Part D plans average premium and Medicare supplemental plan G average premium: $166.58
Average annual healthcare expenditures per capita: $6,998.00
Average overall monthly premium costs + average annual healthcare expenditures per capita: $7,107.04
The Lone Star State may be one of the most affordable options for retirement healthcare costs, but there are other factors to consider before deciding to move there. For example, Texas is one of the most expensive states (#18 according to this 2022 report) when it comes to housing, so that should be taken into consideration before deciding to relocate here. It’s also one of the fastest-growing states in terms of population and has no tax on Social Security retirement benefits, pension income, retirement account income, and all other forms of retirement income.
#6: Idaho
Monthly average Medicare Advantage plans premium: $70.62
Monthly average premium of Medicare part D plans average premium and Medicare supplemental plan G average premium: $178.93
Average healthcare expenditures per capita: $6,927.00
Average overall monthly premium costs + average annual healthcare expenditures per capita: $7,051.78
Idaho is not only one of the most affordable states for retirement healthcare costs, but is also the #1 most affordable state for the cost of utilities. It’s estimated that only 16.3% of the population is 65 and older though, so if retirees are looking to make friends their age, the pickings in Idaho might be slim. Despite that fact though, Idaho is one of the top ten most popular states to retire in.
#5: Colorado
Monthly average Medicare Advantage plans premium: $48.51
Monthly average premium of Medicare Part D plans average premium and Medicare supplemental plan G average premium: $179.46
Average healthcare expenditures per capita: $6,804.00
Average overall monthly premium costs + average annual healthcare expenditures per capita: $6,917.99
Colorado is a beautiful state (in fact, it’s been voted the fifth most beautiful state in the U.S.) and an affordable option for healthcare costs that retirees run into. Aside from healthcare and the cost of utilities though, it can be expensive to live here. Not to mention that Colorado is in the top 10 list of states most prone to natural disasters.
#4: Nevada
Monthly average Medicare Advantage plans premium: $44.36
Monthly average premium of Medicare part D plans average premium and Medicare supplemental plan G average premium: $181.21
Average healthcare expenditures per capita: $6,714.00
Average overall monthly premium costs + average annual healthcare expenditures per capita: $6,826.79
In 2021, Nevada was reported to be one of the most popular states to retire in; perhaps due to to its affordable healthcare costs for retirees. Nevada is also a good option for retirees because the state is very tax-friendly: no state income tax and no tax on Social Security benefits. Although Nevada’s healthcare costs associated with retirement are affordable, the overall quality of healthcare services in the state is very low. It ranked 33rd in hospital safety.
#3: Georgia
Monthly average Medicare Advantage plans premium: $57.40
Monthly average premium of Medicare part D plans average premium and Medicare supplemental plan G average premium: $172.51
Average healthcare expenditures per capita: $6,587.00
Average overall monthly premium costs + average annual healthcare expenditures per capita: $6,701.96
This Southern state is not only the 3rd most affordable state when it comes to retirement healthcare costs, but is also the 6th most affordable state overall according to another study. Don’t be fooled by the low cost of housing and groceries, though. Georgia is also 43rd in healthcare quality and 50th in healthcare access. We tend to need more medical care as we age, and Georgia may not be the best option for older Americans when it comes to quality of care.
#2: Arizona
Monthly average Medicare advantage plans premium: $47.15
Monthly average premium of Medicare part D plans average premium and Medicare supplemental plan G average premium: $179.99
Average healthcare expenditures per capita: $6,452.00
Average overall monthly premium costs + average annual healthcare expenditures per capita: $6,565.57
The 9th most beautiful state in the U.S. is also one of the most affordable for healthcare costs associated with retirement. Arizona doesn’t tax Social Security benefits, inheritance, or estate taxes, which also makes it retirement friendly. However, it ranks 35th in hospital quality since only 20% of hospitals in the state have an A grade, and overall is just okay when it comes to healthcare outcomes.
#1: Utah
Monthly average Medicare Advantage plans premium: $54.95
Monthly average premium of Medicare part D plans average premium and Medicare supplemental plan G average premium: $162.33
Average annual healthcare expenditures per capita: $5,982.00
Average overall monthly premium costs + average annual healthcare expenditures per capita: $6,090.64
Not only is Utah’s retirement-healthcare costs the most affordable according to the data above, but it also ranks 3rd in states with the most A-grade hospitals! It does only have a 65 and older population of 11.4% and isn’t very tax-friendly, but it does rank 11th in the U.S. for the overall quality of care and 8th in overall health outcomes. Plus, it’s the only state with at least part of a national park in every single county and is home to the most charitable people in the country (likely attributable to tithing among members of the Mormon church). Overall, it sounds like a pretty great place to live whether you’re retiring or not!
Healthcare costs are the third highest area of spending in retirement and should be a major factor in the retirement-planning process. Moving to a state with low healthcare costs with retirement is one way to keep overall healthcare spending down in retirement, but there are many other factors to consider. This list can help you and your clients decide if relocating is right for their retirement, but for a truly accurate look at what their healthcare costs will be when they retire, a personalized healthcare planning analysis is ideal.
Christine Simone is a co-founder of Caribou, a healthcare cost prediction and optimization solution for financial advisors. She often writes on the topics of healthcare and women in tech.
Data sources for calculating retirement healthcare costs
https://www.medicareadvantage.com/costs/average-cost-of-medicare-by-state
https://www.kff.org/other/state-indicator/health-spending-per-capita/
Caribou’s industry experience working with retirees.
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