The cost of health care for Seniors (v1.1)

I am a senior and I can assure you it is vital to plan for and factor in healthcare cost into your retirement budget. This essay is about the cost of healthcare for seniors. The core backbone of it is Medicare (unless you are a government employee). The earlier sections apply to everyone in the US. The last 10 sections have quite a bit of Hawaii or Oahu specific content. To give some sort of a scale, I had put in throughout this essay what we have done, and what we may do in the future. The following essay also give a breakdown of our most importants costs in retirement including healthcare costs: What are the costs after retirement?

I don't cover this here, but when planning, it is important to carefully read and know when you are eligible for the various Medicare or supplemental parts, when enrollment can be deferred without penalties, and what the penalties are for late enrollment. 

Medicare is ONLY a secondary payer/payer of last resorts for injury due to auto accidents. The car insurance is the primary for this. Hawaii is a no fault mandatory PIP state (personal injury protection) which is the key option that applies in the auto insurance.  

Here are the key sections. 

• Medicare part A & B Insurance

Original Medicare Part A and B are a great deal for seniors and is government run. Without it, seniors would be loaded down with huge expenses. Part A covers a large portion of in-hospital costs and some skilled short term nursing facility costs and requires no premium to be paid. However, there is a deductible and coinsurance that applies. There is a limit on covered days in hospital or nursing with part A, which part C or supplemental often relaxes to some extent. Please study this carefully as this may be important for treatments like cancer. 

Medicare Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A. You do however need supplemental insurance to cover more of the parts not covered by A and B. You also want to check if your preferred doctor accepts Medicare part B. The standard premium is modest for part B (about $185/month premium and $257 deductible for most people in 2025). For higher income seniors, there is a premium markup called IRMAA for both part B and part D premiums which could be quite substantial. Be aware that Medicare A and B do NOT cover vision, dental, hearing or long term care. 

We have original Medicare A and B. 

• Medicare part C Insurance

I don't have any experience with part C (also called Medicare Advantage) but it is provided by private healthcare companies approved by Medicare and are a privately run alternative to the government run part A and B. It is a competitive market with many companies offering part C plans and benefits and premiums and deductibles vary widely. Some even partly cover prescription drugs cost, vision or dental to make the plan more of a one stop plan (prescription drugs normally covered by Medicare part D). The government pays the private companies for a good part of the cost to make the plans more attractive. The services are typically offered only by that company's facilities. Pick with care when you become eligible since it may be difficult or too expensive to change the plan later. 

• Medicare part D Insurance

Medicare part D covers prescription drugs and is privately run with the government paying the companies part of the costs. It is again a competitive market with many companies offering plans. Premiums tend to be somewhat modest. Many Medicare advantage plans also lump prescription drugs with their plans. The law passed by congress limits prescription drug out of pocket cost for a senior to a maximum of $2000/year. The out-of-pocket cost for seniors for generics is low but specialty drugs or new drugs can be very expensive for seniors. The government also negotiates with pharmaceuticals the cost of a few key drugs for seniors on Medicare in the new law. The law also puts a cap on insulin out of pocket cost for seniors to something very modest. 

We have Medicare part D with AARP recommended United healthcare plan.   

• Medicare supplemental Insurance (for seniors on part A and B)

This insurance (also called Medigap insurance) covers costs not covered by A and B. Some also cover foreign travel emergency costs to some extent. Medicare Supplemental Insurance works alongside your Original Medicare benefits to help cover the gaps in coverage that could otherwise lead to significant out-of-pocket expenses. These plans are standardized across most states, meaning that no matter which insurance company you choose, the benefits remain the same for each plan type. With a Medigap policy, you’ll have greater control over your healthcare costs and the flexibility to see any doctor or specialist who accepts Medicare nationwide. No other health insurance plan offers the same level of flexibility. This is offered by private companies and is a competitive market. 

The government has defined a set of tiers for such plans. The key tier plans are A,B,C,D,F,G,K,L,M, and N. Plan F is the most comprehensive but also has the highest premiums and is quite pricy. Plan F is no longer offered for new enrollees. Plan G is the next most comprehensive that is available today. Only Plan C of the currently available plans cover part B deductible (Plan F also did). The premiums can increase yearly so be aware. Pick with care when you first become eligible since it may be difficult or too expensive to change the plan later. 

We have Medigap plan F with AARP recommended United healthcare Plan. 

• Long Term Care Insurance

Long term care insurance is offered by private insurance companies, and the premiums can be very high if the policy is obtained later in life. Without insurance the costs per year would be HUGE!! Get it early in your career if you need to. Many workplaces offer it. The premium and benefits typically do not change year on year. The insurance company you have it with may over time be acquired. They may offer a coverage upgrade periodically with a corresponding premium adjustment. Coverage can potentially span across long term nursing home costs, assisted living costs, costs for adjustments to your home, and in-home care costs. Relying on family to take care of you may be met with disappointment!! But nursing homes can be a hell on earth for some individuals. It depends on your personality and expectations. 

We have LTC insurance taken out very early in career currently with John Hancock.  

• Dental Insurance

Medicare A and B do not cover dental benefits but some Medicare advantage plans do to some extent. Private companies offer dental insurance. There might be a cost or benefit advantage if you stay with the company you had dental with when employed. 

We have dental insurance with Metlife. 

• Vision Insurance

Medicare A and B do not cover vision but some Medicare advantage plans do to some extent. Private companies offer vision insurance. There might be a cost or benefit advantage if you stay with the company you had vision with when employed. 

We have vision insurance with VSP. 

• Hearing

Medicare A and B do not cover hearing but some Medicare advantage plans do to some extent. I don't know of a standalone hearing insurance offering per say from private companies. Hearing aids can be very expensive.   

• Emergency Medical

If you need immediate assistance, you may need to go to an emergency department. Without insurance, emergency care cost could be huge. Refer to your insurance coverage brochure for degree of coverage. If you have A, B and Medigap, most should be covered. 

• Urgent Care

If you need quick assistance, you may need to go to urgent care. Without insurance, urgent care cost could be quite large. Refer to your insurance coverage brochure for degree of coverage. If you have A, B and Medigap, most should be covered. 

• Labs and diagnostics

This is mostly covered by part B or part C or supplemental. Cost of diagnostics like MRI or CT scan could be very large without adequate insurance coverage. Most doctors require diagnostics of some sort to decide what to do with many ailments. Refer to your insurance coverage brochure for degree of coverage. If you have A, B and Medigap, most should be covered.  

• Long-term Nursing Home care on Oahu

​Nursing home care costs vary significantly by location, room type, and level of care required. As of December 31, 2023, the median daily rates for long-term nursing home care in Honolulu County, which encompasses Oahu, were as follows:

• Private Room: $538 per day​
• Semi-Private Room: $501 per day​
• Ward Room: $472 per day​

These daily rates translate to approximate monthly costs of:​

• Private Room: $16,140​
• Semi-Private Room: $15,030​
• Ward Room: $14,160​

It's important to note that these figures represent median costs; actual expenses can vary based on the specific facility, the level of care required, and any additional services provided. Additionally, long-term care costs in Hawaii have been rising, often outpacing national averages. For instance, a recent report highlighted that the annual median cost for a private room in a nursing home in Hawaii reached $196,370 in 2024, marking a 34% increase from the previous year. 

Given these significant costs, it's advisable to explore financial assistance options such as Medicaid's Med-QUEST program, which covers long-term care expenses for eligible Hawaii residents. LTC insurance typically do NOT cover the full cost. Substantial additional assets would be required to bridge the difference. Another option is to fully explore all home care or assisted living options. Another option is to go to a facility out of state or abroad. Arizona and Texas for example are much cheaper. India for example is much cheaper but still delivers quality care. In Texas, the median monthly cost for a semi-private room is approximately $5,125, while a private room averages around $7,092. In Arizona, the median monthly cost for a semi-private room is about $6,540, and a private room averages around $7,118. These figures are based on data from 2023 and can vary depending on specific locations within each state, the facility's amenities, and the level of care needed. 

Our long term care policies for example are international in scope and an Indian facility is an option. 

• Senior Assisted living care on Oahu

Assisted living costs on Oahu, particularly in Honolulu, are notably higher than national averages. According to Genworth's 2023 Cost of Care Study, the median monthly cost for assisted living in the Honolulu area is $9,908, which is approximately $4,558 higher than the national average of $5,350. 

These costs can vary depending on the specific location within Oahu. For instance, in Kapolei, the average monthly cost aligns with the state average of $6,039, while Honolulu's average is slightly lower at $5,299. ​

Given these substantial costs, exploring financial assistance options such as Medicaid's Med-QUEST program, which covers long-term care expenses for eligible Hawaii residents, is advisable. Another option is to go to a facility out of state or abroad (Arizona and Texas for example are much cheaper).

• In-home senior living care on Oahu

In urban Oahu, specifically Honolulu, the costs for in-home senior care are as follows:​

Homemaker Services: Assist with daily living tasks such as cleaning and meal preparation. The average monthly cost is approximately $7,627. ​
Home Health Aides: Provide personal care services like bathing and dressing. The average monthly cost is around $5,720. ​

These figures are based on a 44-hour workweek. It's important to note that costs can vary depending on the specific services required and the level of care needed. For personalized rates, it's advisable to contact local agencies directly. For example, Malama Maika'i offers customized care plans and invites potential clients to discuss their needs to receive a personalized quote. Additionally, agencies like Hawaii Senior Care, located in downtown Honolulu, provide professional caregivers trained to assist with personal care and other needs. Given that I am in Kailua on the windward side of Oahu, Wilson Care Group offers services in my area, including an Adult Residential Care Home in Kailua. 

• Cremation/Burial, Body transportation insurance and Estate Planning

Above is for seniors while alive. What happens if you die or can no longer make medical choices?  It might be a good idea to have a prepaid cremation or burial contract at a mortuary near you where you are likely to live out your life. Cremation/Burial costs are expensive and keep increasing year on year and a one-time prepaid contract locks in the cost. Also, if you end up in a nursing home out of state, it might be a good idea to have a one-time prepaid insurance to have your body shipped from out of state to your mortuary. 

It might also be a good idea to have everything well documented and thought through so your heirs or living trust executors have an easy time. Besides legal documents for estate distribution, it might also be a good idea to get in place legal documents on who legally can make medical decisions for you if you are unable to do so yourself or if artificial medical means should be used to prolong your life if you are in a coma. 

We have both a cremation contract and body shipping insurance and everything documented and thought through for living trust executors. We also have medical legal documents done and power of attorneys done. 

APPENDIX:

• Key hospitals on Oahu

I will focus on facilities in Honolulu, Pearl City and Windward Oahu only. The key hospitals and groups are: 

Hawaii Pacific Health group consists of a network with four components - Pali Momi, Straub Benioff, Kapiolani and Wilcox (last primarily in Kauai). I use Straub (Facilities in Kailua, Honolulu and Kaneohe) for most services. Straub’s main hospital is in Honolulu. My wife uses Straub and Pali Momi (Facilities in Pearl City) for some services. 

The Adventist Health Castle has facilities on the windward side of Oahu (Kailua and Kaneohe). Castle’s main hospital is in Kailua. My wife uses it for some services. 

The Queen's Medical Center, originally named and still commonly referred to as Queen's Hospital, is the largest private non-profit hospital in Honolulu, Hawaii. The institution was founded in 1859 by Queen Emma and King Kamehameha IV and is in Honolulu. We use it for some services. 

Kaiser Permanente is a national brand and an HMO that offers services on Oahu. Kaiser’s main hospital is in Honolulu. We used Kaiser throughout my stay in the San Francisco Bay area but don't use it here.

Kuakini Health System runs Kuakini Medical Center which is a private hospital in Honolulu. Kuakini Health System also runs geriatric care facilities and a foundation. We don't use its services. 

I don’t know much about Military affiliated health facilities like Tripler Army Medical center in Honolulu. 

• Key diagnostics and urgent care centers on Oahu. 

Will limit to windward Oahu.

The key diagnostic facilities are Windward Health Center, Straub Benioff, Clinical Labs of Hawaii, and Diagnostic Laboratory Services. 

For Mammogram, MRI, Ultrasound, CT Scan, or Nuclear Medicine, you would need to go to Castle Hospital. X-Rays are available at Castle Hospital, Diagnostic Laboratory Services, and Windward Urgent Care. I go to Straub hospital in Honolulu for all such advanced Imaging services.  

The key walk-in urgent care centers are Windward Urgent Care, Braun Urgent Care, Adventist Health Castle Urgent Care, and MinuteClinic at CVS.

Castle hospital has an emergency department.  

• Key assisted living and nursing home facilities on Oahu

I will just briefly list the key nursing home facilities because they are out of my price range (unless it is for short term rehab. I will focus more from that perspective), but elaborate more on assisted living facilities. Some assisted living facilities have a tier of service at added cost that rises to a nursing home level. 

Oahu hosts several reputable nursing home facilities offering skilled nursing and rehabilitation services. Here are some key facilities:

- Maunalani

- Hale Nani

- Leahi

- Liliha

- Pohai Nani (Kaneohe). My wife used it for short term rehab after surgery.

- Aloha (Kaneohe). Our friend used it for short term rehab. 

There are a large number of assisted living options on Oahu. I will focus on the key urban areas. So, what are assisted living facilities and what is assisted living? Let's start with the basics. Assisted living is a type of long-term residential care for seniors who need some help with daily tasks like laundry, transportation, and medication management. Most assisted living facilities offer support with daily activities, as well as opportunities for social and recreational activities. There are even places that don't refer to themselves as assisted living which may provide assisted living services. This includes retirement homes, nursing homes, or senior living communities.

Most assisted living facilities can be large, hotel-like properties, or more intimate single family homes (often called board and care or residential care homes). The terminology a community uses can vary slightly due to preference or state regulations. For example, you might see assisted living facilities sometimes referred to as long-term care facilities or even personal care homes.  While each community is unique, most offer room and board, 24-hour (non-medical) care, housekeeping, laundry services, social engagement, wellness programs, and much more.

Although the services, amenities, community atmosphere and culture will vary from property to property, all assisted living facilities share a common goal: to support aging adults in a respectful and personalized manner.

This data is from seniorly.com. Honolulu offers a diverse range of 165 Assisted Living communities giving families varied options to choose from. The average cost of assisted living in the Honolulu area is $3,690, and the communities in the Honolulu area have a average rating of 9.7 out of 10. Kailua offers a diverse range of 102 Assisted Living communities giving families varied options to choose from. The average cost of assisted living in the Kailua area is $8,770, and the communities in the Kailua area have a average rating of 9.7 out of 10. Kaneohe offers a diverse range of 153 Assisted Living communities giving families varied options to choose from. The average cost of assisted living in the Kaneohe area is $9,080, and the communities in the Kaneohe area have a average rating of 9.7 out of 10. Pearl City offers a diverse range of 202 Assisted Living communities giving families varied options to choose from. The average cost of assisted living in the Pearl City area is $8,750, and the communities in the Pearl City area have a average rating of 9.7 out of 10. 

There are also assisted living facilities with memory care, which cost more, for seniors with dementia. Examples are Hale Kuike, the Plaza at Waikiki, Punchbowl and Moanaloa, and Kalakaua gardens. Honolulu’s average monthly cost of $6,719 for memory care is higher than the $4,781 average price tag in Kahului on the island of Maui. Don't have data for Kailua, Kaneohe and Pearl City. Despite being higher than the national average, the cost seems much more reasonable when compared to two major cities in California, with Los Angeles offering slight savings at $6,563 and San Francisco averaging significantly higher at $7,899.

I wont list any other individual property but if the need arises, would have to really dive into that research!!

• Hawaii State Government retiree medical overview

A number of my relatives here work or have worked in the Hawaii state government. I will briefly discuss their health benefits. I, however, will skip how the benefit calculations change with the years of credited service. Most Hawaii state government retirees and retired teachers of Hawaii public educational institutions are eligible for health benefits under the Hawaii Employer-Union Health Benefits Trust Fund (EUTF). Benefits carry over to eligible dependents even after the retiree is deceased. Some retirees may have accumulated Medicare benefits in addition, and that changes the overall benefits somewhat. 

The following persons are eligible to enroll in the benefit plans offered or sponsored by the EUTF for Retirees:

• A retired employee. You do not need to be covered under an EUTF Active Employee Plan at the time of retirement to be eligible to enroll in the EUTF retiree plans.
• The surviving spouse, Domestic Partner or Civil Union Partner (DP/CUP) of a deceased retired employee, provided the spouse or DP/CUP does not remarry or enter into another domestic or civil union partnership.
• The unmarried child of a deceased retired employee provided the child is under age 19 or under age 24 provided they are full-time students attending an accredited school, college, university or technical school, with no surviving parent.

The following persons are eligible for coverage as dependents in the benefit plans offered or sponsored by the EUTF for Retirees:

• The Retiree’s legal Spouse, Domestic Partner or Civil Union Partner(DP/CUP). A spouse or partner who is eligible for Medicare must be enrolled in Medicare Part B to be covered by an EUTF retiree medical and/or prescription drug plan.
• You or your spouse’s or DP’s/CUP’s unmarried children under age 19. This includes children by birth, marriage or adoption. Dependent children by legal guardianship are covered to age 18.
• You or your spouse’s or DP/CUP’s unmarried children between the ages of 19-23 provided they are full-time students attending an accredited school, college, university or technical school. This includes children who are away at school and dependent upon you for support.
• Coverage can be continued for an unmarried child incapable of self-support due to mental/physical incapacity that existed prior to age 19.
• Child covered by terms of a qualified medical child support order (QMCSO) provided they meet EUTF’s other qualifications.

Benefits span across life insurance, dental, vision, medical and prescription drugs. Plan services are offered by HMSA, Kaiser, Humana, CVS Caremark/SilverScript - SSI (prescription drugs), VSP (vision), HDS (dental), and Securian Financial (life insurance). Retirees have to make the needed choices from the options offered. Details of the offerings are not described here.   

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