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Optimizing healthcare purchasing in retirement

senior lady reviewing health care options on her phone

New analysis from Alight demonstrates that efficient healthcare purchasing can dramatically reduce retiree cost and support a more secure retirement.

To illustrate the critical importance of efficient healthcare purchasing to retirement security, Alight studied the projected financial impact throughout retirement associated with purchasing various levels of individual private health insurance to supplement Medicare. Alight’s analysis shows that healthcare purchasing adjusted to the individual retiree healthcare and lifestyle need can dramatically reduce healthcare expenditures in retirement by up to 50%. This translates into tens of thousands of dollars in savings. Alight’s analysis demonstrates that informed, personalized healthcare purchasing in retirement is just as important as accumulating meaningful assets to support a comfortable retirement. 

Alight can help retirees effectively navigate the marketplace and make informed choices 

The complexity of the insurance marketplace makes it challenging for a retiree to effectively evaluate their options and make informed decisions. In addition to understanding the coverage levels of options across carriers, retirees must understand their current health needs, risk tolerance, and likely future needs. It is very easy for a retiree to make an inefficient, inappropriate choice that consumes significant levels of retirement assets over time. 

The Alight Retiree Health Solutions (ARHS) Private Medicare Exchange provides personalized decision support, with ongoing advocacy designed to help Medicare-eligible retirees avoid common pitfalls that typically undermine efficient healthcare purchasing. Alight’s retiree-centric customer service approach helps retirees identify, evaluate, and enroll in individual healthcare coverage calibrated to their specific needs, eliminating wasteful spending and protecting retirement assets. Alight helps retirees select the optimal coverage based on their facts and circumstances at that time, and provides a trusted advocate to support them throughout their retirement, and as their needs evolve. 

As part of a broader retirement wellbeing strategy, employers need to provide their employees and retirees access to tools to support informed, personalized healthcare decisions. Alight’s analysis shows the critical role effective health plan selection plays in supporting fundamental retirement security objectives.

Andre Walton
Alight Retiree Health Solutions EVP

Employer-sponsored group insurance 

Alight’s analysis is focused on leveraging individual Medicare health insurance to supplement Original Medicare and does not explicitly study employer-sponsored group insurance.

Alight has found that the individual marketplace can outperform single-risk pool one-size-fits-all group coverage with a consistent 20% - 50% purchasing efficiency opportunity, when the marketplace of individual Medigap/Medicare Supplements, Medicare Advantage, and Medicare Part D coverages are considered. This includes both group-based Medicare Supplement plans with prescription drug coverage as well as national open access Medicare Advantage Part D Plan PPOs, neither of which can drive the purchasing efficiency found in the individual marketplace for various reasons. Therefore, a retirement asset analysis focused on employer-sponsored group insurance, as opposed to the individual marketplace, would likely indicate that even greater amounts of retirement assets are required to support retiree needs, simply due to the observed financial limitations of group purchasing. 

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